Tips for a first time property buyer?
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Good grief, thank you all! I'm slightly more worried than I was previously. Lots of excellent advice and some stuff to ponder for sure.
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Around here houses for a single guy low on the ladder in IT are just way way out of the budget ( they start around 400/450 for a fixer upper). I'm looking for a less expensive condo, but keeping in mind the strata fees. Example: 200k mortgage, but 500mth in strata is roughly the same monthly payment as a 350k mortgage.
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I think the rule of thumb is 4 times your household salary is the upper limit for a house you can afford.
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@Nic I want to keep it under that if at all possible. Agreed it's a good rule.
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Also compare rents to mortgages for an equivalent property. If the mortgages are way more than rentals, then you know your area is in a housing bubble and it's probably best to rent and save the difference between the two until house prices come back in line with reality. Don't make the mistake we did of buying at the height of the bubble in 2008 and then having to shortsell our house for half of what our mortgage was for.
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@Nic ouch that had to hurt....
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Yeah for sure. Probably hurt the Bank of America more than it did us, since they had to absorb the loss. Still, ended up with a black mark on our credit record that meant we couldn't buy a house again for three years. Not as bad as a foreclosure or bankruptcy, but still a hard lesson learned.
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Here's it's way cheaper to buy than rent. You can't rent for under $1,100/month without utilities. Also if you are willing to wait a while and pay for a lawyer and an inspection foreclosed houses can be a good option.
You always want to pay a lawyer to to background on a home, don't forget that. At least in the US if the previous owner had any liens/debt against the home, you have to take over paying it no matter what is is as the new owner of the home.
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@thecreativeone91 Does the title company do that, and the title insurance cover you in case of an undiscovered lien?
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@Nic said:
@thecreativeone91 Does the title company do that, and the title insurance cover you in case of an undiscovered lien?
My understanding was that, that is the point of that, yes.
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@Nic said:
@thecreativeone91 Does the title company do that, and the title insurance cover you in case of an undiscovered lien?
Yeah. I wouldn't buy a house without title insurance because a lawyer could miss something. But most title insurance has limitations so I'd still have a lawyer do a deed search. I would think if you take a mortgage out they'd make you get one anyway.
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Just found this in my Twitter feed: http://twocents.lifehacker.com/should-i-buy-a-home-or-just-keep-renting-1699277766
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@nadnerB That lead me to this calculator. Very interesting to play with the sliders a little bit.
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?abt=0002&abg=1
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@scottalanmiller said:
@Nic said:
Another one I remembered. To get a good feel for the neighborhood, go walk around and knock on doors on the weekend and chat with your prospective neighbors. They'll give you a good sense of what the place is like.
We had people do this to us in Texas and we were able to tell them that the house had been on and off the market, who else was looking at it and that the foundation had failed!
There are two types of houses in Texas. Ones with foundation problems and ones that will have foundation problems.
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@PSX_Defector said:
@scottalanmiller said:
@Nic said:
Another one I remembered. To get a good feel for the neighborhood, go walk around and knock on doors on the weekend and chat with your prospective neighbors. They'll give you a good sense of what the place is like.
We had people do this to us in Texas and we were able to tell them that the house had been on and off the market, who else was looking at it and that the foundation had failed!
There are two types of houses in Texas. Ones with foundation problems and ones that will have foundation problems.
I recommend to people to only buy houses that have had foundation problems - because they are the known quantity. Any house that hasn't had them yet is just a disaster of unknown proportions that WILL happen.
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@PSX_Defector @scottalanmiller Why are houses in Texas so poorly founded... foundation'ed... poured... bah you know what I mean
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@MattSpeller said:
@PSX_Defector @scottalanmiller Why are houses in Texas so poorly founded... foundation'ed... poured... bah you know what I mean
If I remember correctly it has something to do with the sand underneath the foundation and how it shifts over time. Although don't quote me on that.
Where I am we have more stone then soil which brings its own foundation issues.
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@coliver said:
@MattSpeller said:
@PSX_Defector @scottalanmiller Why are houses in Texas so poorly founded... foundation'ed... poured... bah you know what I mean
If I remember correctly it has something to do with the sand underneath the foundation and how it shifts over time. Although don't quote me on that.
Where I am we have more stone then soil which brings its own foundation issues.
Yup, that's it. The ground shifts like crazy.
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@coliver said:
@MattSpeller said:
@PSX_Defector @scottalanmiller Why are houses in Texas so poorly founded... foundation'ed... poured... bah you know what I mean
If I remember correctly it has something to do with the sand underneath the foundation and how it shifts over time. Although don't quote me on that.
Where I am we have more stone then soil which brings its own foundation issues.
No, it is the lack of sand. It's not ground shift, it is clay. Texas has nearly pure clay under much of the DFW region. In the summer the clay bakes and shrinks. In the winter it liquifies and expands.
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@scottalanmiller said:
@coliver said:
@MattSpeller said:
@PSX_Defector @scottalanmiller Why are houses in Texas so poorly founded... foundation'ed... poured... bah you know what I mean
If I remember correctly it has something to do with the sand underneath the foundation and how it shifts over time. Although don't quote me on that.
Where I am we have more stone then soil which brings its own foundation issues.
No, it is the lack of sand. It's not ground shift, it is clay. Texas has nearly pure clay under much of the DFW region. In the summer the clay bakes and shrinks. In the winter it liquifies and expands.
Ah, I figured if it wasn't sand it was going to be clay. We have that up here too for some parts of our region... but we don't get the extremes that Texas seems to.
