Buying a house
Moms View Message Board: General Discussion: Archive May 2006:
Buying a house
Well ladies, looking for all your combined experiences. My dh and I have decided to finally buy a house. We live in a townhouse and I have been a chronic renter all my life. I'm ok with the idea of buying but I will miss some of the freedom that comes with renting. My question for all of you is... What are some of the things (ie expenses, repairs, upkeep) that you didn't anticipate when owning a house that surprised or shocked you when you finally owned your own house. I am just trying to go into this with my eyes wide open. Thanks in advance for your advice/thoughts.
Ahh, I remember well...
We had rented an apartment for 5 years. We had our heat, water, and trash included. So those were three things right off the bat that we would have to take responsibility for on our own.
You will need: 30 Gallon Rubbermaid trash cans, rakes
When we first bought our house, I was totally unprepared for the expense of the trash pickup- it still blows me away, and it's been 12 years. We were charged $73 for three months' service! That's still high compared to what we are paying now- $60 for three months, but we don't have the waste cart provided by the trash company, which would be more money, so we bought our own trash cans. By all means, get out the phone book and call for rate quotes on trash pick-up to find the best prices. You also have yard waste to consider for the fall when the leaves come cascading down to the ground and demand that you rake them up. (hence the rakes.) That's a separate charge on the bill. We can cancel it anytime, and it's only available April through November. For yard waste, they have a cart that they give us. When we fill it up with leaves, we can also use tall paper leaf bags available at Home Depot/Lowes/Menards, and they said that they will accept 3 of those bags per pick up at no extra charge. Our city also has free leaf drop off days for a period of a week each spring and fall.
Our city water department also bills in cycles of three months and usually runs about $130 every billing cycle. We can pay in 3 monthly payments as well.
We use natural gas and are on a budget plan. They estimate how much gas you will use based on your usage from the past year, and charge you one amount each month regardless of how much gas you actually use, although they still keep track of how much you owe them for the gas you actually use. It's easier to plan that way, since you know exactly how much your payment will be every month. At the end of a 12 month period, they "settle," meaning that you are then required to pay whatever you still owe, or they will credit you if you overpaid. Then they will recalculate your new monthly payment for the next 12 month period. It may not be possible for you to get onto a budget plan right away since you would be a brand new gas customer and there would be no prior history of gas use for them to estimate your monthly payment by. But you can call and ask them what they can do for new customers.
When we bought our house, we needed all the appliances. We got lucky and a lady who was a regular customer at the store where I worked was so excited one day b/c she was doing a total remodel of her kitchen and she was getting her new appliances that day. She and her husband gave us their old stove and fridge. Then my husband worked with a guy who bought a new washer and dryer and we bought his old ones from him. We are still using the washer.
You will need: Lawnmower, rakes, hedge trimmer, weed wacker, snow blower, grass seed and/or fertilizer,
When we first moved here, we didn't have a lawn mower either. Once again, my job as a store clerk helped out. Another regular customer was in one day and he was excited b/c he was getting a brand new riding lawnmower. I bartered with him- I bought him a case of beer and he gave me his old push-behind mower! So, I got lucky, but my point there is don't be afraid to go to the Bargain Corner of the Sunday paper and see what used appliances people are selling in your area. When you are just starting out, used is better than nothing!
Our first mistake was getting our credit card out and buying paint and other various fixtures to make our home comfortable and perfect. By the time we had been in our home for 2 years, we were in trouble. Then the unexpected happened- My overtime was cut AND my husband had to get another job and take a pay cut, all in the same year which added to our burden of paying the mortgage and credit card bills. When the overlimit fees and finance charges and late charges add up, it's a tsunami of financial heartache that will put stress on your marriage and make owning a home more of a burden than a blessing. Be sure you are ready for all the little extras you will want to do for your new home, and stuff some away for a rainy day, too.
If your husband is the handy type, you will need one of these. It is so handy for those trips to Home Depot for the larger items that can't fit into a car.
My experience was that when we bought our home, the previous owner had cleaned & painted the basement until it was pristine. He even cleaned out the french drain. Within a year or two, the basement apparently went back to its previous condition. A total mess with mold growing on the basement walls. So always ask if they have had any problems with the basement.
Ask how old the furnace is.
Ask how old the roof is.
Ask how old the hot water heater is.
Also, I will never buy another house without central air. I was so miserable last summer. This summer we are having it installed.
Have it tested for lead paint if it is an older house.
A big thing for me, I hate the smell of cat pee in a house. If I were looking for a house and it had cat pee smell in it, I would just turn around and walk right out. Apparently cat pee never goes away, or that is what I've been told.
It sinks into the floorboards.
Look at the windows & make sure they are newer.
Also, unless one of you are very handy & motivated, I would'nt buy a high-maintenance house. We bought a fixer-upper & it still is a fixer-upper. LOL
Also check the plumbing.
If I think of anything else, I'll let you know.
Me, again. In our area, the taxes are real high. The mortgage payments are an extra 220.00 a month just for taxes and homeowners insurance. Apparently, three miles away in the next county, they are a lot lower for some reason, so always ask about how much the escrow would be.
A big yard is nice, but if DH works a lot and you are too busy to do yard work, it is a pain.
Sandy reminded me of an article I read on MSN.
How to Spot a Shabby Remodel
LOL, me yet again! When you are buying a house, it is very tempting when you see a house you really like to try to make things work even though it is way out of your price range. I have known people to get into real bad financial trouble for buying a house outside their means and now their bills are out of control. Thank God we didn't do that. At the time we bought our house, we were both still working. Six months later, my DH lost his job but Thank God we were able to live off of my salary and his unemployment until DH got a job.
Me again too!! HAHA
I found another article that I had bookmarked and lost!
7 Home Buying Traps
please keep the thoughts coming! I don't feel like I can have enough impute. I know we have been very conservative in our budget as to what we will spend. The banks would give us scary money to spend but I've basically said I will only spend x amount each month total for everything so what price house does that equal. Based on where we live I think we can find a nice home for what we are willing to spend but I know there are all the extras that come with home ownership and thats where I don't want to be to surprised.
Here's one I wish I had known before we bought our house 6 months ago. When in the kithen, turn everything on, lights, microwave, dishwasher, etc. at the same time. We had our microwave out of commision not one month after buying the house. It cost nearly $500 to get it fixed (built in kind). Thank goodness the previous owners had paid for homeowners insurance for a year. We only ended up paying bout $50 but it took them 2 months to get it fixed.
Also, check water pressure on every faucet and flush every toilet. Basically, go through the house as if you lived in it and try to spot problems. I believe the owners have to get those things fixed or bring the price of the house down. Open all the windows to see if they stick, check the window screens-we didn't and one window doesn't completely close and three screens were torn. If I think of more, I'll come back.
Ditto Above-Make sure you buy a house big enough!!!My DH and I were also conservative with our 1st house and didn't want to spend too much.When we had our DD we were like Oh,Oh.It seems like alot of money you are borrowing but a few thousand more really doen't make a difference in payments.Make sure you have a solid roof,non leaking basement,check windows,furnace,water pressure.Buying a 1st home is very overwhelming but it is waaay better than renting.Good Luck with you're new adventure
I haven't read all of the responses, but my 2 cents is this:
A house is always going to cost, cost, cost! Yes, it's a great investment, but sooo much more $ than renting.
Furnace, A/C, roof....that will clean you out right there so make sure it's up to date or that you can afford to fix one/all within reason.
Flooring...$$...ask for a carpet allowance if it's not in good shape.
Property taxes....it's never gonna go down, so keep that in mind. If you start high, it's only going to get worse. (I know a lot of that just depends on where you live, BUT, keep it in mind.)
We bought a wonderful house that had soooo many updates, and was completely neutral when we moved in. That doesn't matter! LOL There will still be things that YOU want to do to it as far as decorating goes, furnishings, etc.
Landscaping....enough said there. tons o' $ depending on your likes/dislikes.
And then just general repairs that aren't big $ but add up. An appliance breaks, a faucet stops working, etc. Also, once you buy, remember to KEEP UPDATING. One thing every year will keep you good, then when you go to sell, you won't be overwhelmed with all of the things you "should" have done. Plus, you'll get more out of it in the end.
We rented for a year before buying (a house) and we had to pay everything just like owning except for repairs, so we were pretty prepared that way. I'm not sure what utilities you pay now, so if you only pay like phone/cable/internet, be prepared for a large jump in utilities like gas, water, heat, electricity, and trash.
Also...homeowner's insurance. Renter's insurance is like $100/year, homeowner's (ours at least) is around $1000/year.
Don't want to scare you off. Owning is GREAT!!! It's very overwhelming at first, but well worth it. BUT, it isn't a cheap endeavor by any means.
I suggest to really make a list on the home(s) that you're considering bidding on of the things that you know that YOU are really going to want fixed/repaired in order of importance. Add it up and see if it's something you can/willing to pay for to make it like you want it.
Best of luck to you!!! It's very exciting!!!
And yes, the bank will loan you WAY more than most people can actually afford, so go with what YOU know about your budget and not what the bank says. That's a very good way to get into b-i-g trouble!!
Don't forget to check out the fence really well, especially if it is a wood fence.. We just had to have ours replaced and it was $3800!!! for only 138 feet long. When you are looking at a fence make sure you go up and push on it to make sure it is sturdy because less than a year after we moved in ours started falling over, and that was not an expence we had planned on at all.
The other thing that we got sc**wed on was our realestate agent was really inexperienced and didn't even get us a walk through before we signed the papers, so we didn't know things like there was a circle of bright green pain in the carpet of one of the bedrooms that was covered up by a bed, so when we looked we didn't see it.
Before you decide on an agent make sure you know someone who has used them before or that they have been doing this for years and you are not thier first client.
Just make sure you see the house before you sign the papers without any furniture in it. And make sure that the previous owners took all their trash with them or had it taken away. I still have stuff in my garage that isn't ours because it will cost for the garbage people to take it away and we haven't done it yet.
We have bought and sold many many houses. My first piece of advice is don't settle, you will find a house that is right, and you will know it. Second when looking at houses, make a list...things you would want to do to make it your dream house. Guess on prices. If that list gets way to high, then you need to look at how many of those are items you really want and then think about it more.
Costs...insurance, you can get a quote before hand.
taxes...oh my gosh, they can be so high!
Bills...I can say that whatever we have looked at for average electric, etc has never really been close. Look at what you are paying now and double it and you will be close.
Trash, ours is included in the water bill, we only needed a regular trashcan.
Lawn...how are you going to take care of this? You can pay a service, or you can do it yourself. You need a mower, a weedeater (and maybe a seperate edger). I spend about 50 dollars a month on the yard maintance, which includes ant killer, fertilizer, etc.
Get a home warranty, ask the seller to provide it, it will save a lot of hassle for you.
Oh cable outlets and phone outlets. Look to see where they are, it cost about 100 an outlet to add (unless you get a deal). When I signed up for cable I got 3 installed for free, take advantage of that. If you only need to, but there is a room that later may get a tv, go ahead and have it done under the free clause.
window coverings, these add up quick. I wouldn't shy from buying a house because it had ugly window coverings, but I would negotiate that cost in their. Premade blinds run about 50 dollars each. Curtains can be really spendy or cheap if you find a great deal.
Art...for us this is the expensive thing, we tend to always need more things to decorate with and we have $$ taste!
That is all I can think of for now.
In general I spend about 100 a month on house stuff, fixing something, hanging pictures, new broom, new mop, paint touch up somewhere. What we do is we have a certain amount put into a savings account each month, then as we need home repair stuff we have the money available. If it is a small purchase we look to see if we can afford it out of the check book, and then just keep building in savings.
A Real Estate Agent will ask you how much you want to spend. I would give them a number that is 5-10K below what your actual limit is. The reason being is that they will always find a house that is "perfect" but a little more than what you planned on spending. Not busting on Real estate brokers, that is their job, but I would rather give them a lower figure than the exact figure and end up spending a sizable amount more. That way, you are in charge.
Thank you so much for all your imput. There is so much to think about and worry about. And just to make things even more interesting is that my dh and I have such DIFFERENT tastes. This should be a barrel of laughs! (not)
After you find a home that you like, you can make an offer contingent on a home inspection. I would definitely do this. It does not cost a lot to do one. The inspector will find any problems with the house before you buy! Then you can negotiate repairs with the seller before you finalize the contract. Also, you should have a final walk through scheduled before you close.
I read somewhere that your housing expenses including mortgage, taxes and utilites should not be more then 25-30% of your income. Yes, lenders will usually approve you for more then you can really afford. I would first sit down and list all of your current monthly expenses. Then you can list the expenses that will come with a house...higher utilities, homeowners insurance, maintance and repairs. Also, check on property taxes for the area. If the area is appreciating, realize that your taxes will probably go up. Most areas usually reassess every 2-3 years. You may have to get mortgage insurance if you don't have 20% to put down. Also, see if there are homeowners fees associated with the neighborhood.
I would do a lot of research before you buy, so you know the market and what you can get for your $$. That way you will have reasonable expectations when you go looking. Also, research the steps to buying a home.
Another thing, a lender will may try to use your gross income to show that you only spend 25-30% as Debbie listed. Have them go by your net income as well. That is a totally different figure.