Home buying - share your experiences and tips

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1

I’ve been toying with the idea of buying a house for past few months. Initially I thought I will buy one next year (I love to procrastinate) but now I’m thinking to go for it.

Roughly speaking, I’m looking to buy a townhouse for now. Something with 2+ bedrooms and 1.5/1.75 bathroom. And something built withing past 5 years. I think for a single person, a townhouse is good for next 5-6 years. And even if I would get married, it’d probably be few years before we would want to move to a bigger house (I’m mentally not ready on mowing the lawn, doing projects on front end landscaping with all those flowery benches, and applying my creative, inventive talents on basement rennovation on full scale basis; although it’d be nice even at this point to have a small basement in the house).

What I’m hoping for is to hear different experiences on any aspects of home buying phenomenon that people may have gone through here at gupshup.

Consider me as ignorant as I’m on buying a house thingie and give me some mashwarays.

Some of the specific questions I have at this point are:

1- Are home prices like used car prices that you can negotiate or it’s pretty much fixed?

2- What are various costs etc in case of getting a house besides just the monthly mortgage payments and utilities?

3- How much pain in the butt owning a house is?

4- A buyer doesn’t pay the agent anything, right?

5- Any good home buying sites etc?

6- Is it better to buy a house in planned communities compared to non-planned communities? What are planned communities anyway?

7- Are there anyother types of houses that loosely come under the category of townhouse? What’s the difference?

8- What are the pros and cons?

[This message has been edited by Roman (edited July 02, 2000).]

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Rome, abhe taza taza choot lage hay .. so, I think I an give you some insiders info …

Although, I went for a house (rather than town one), yet you can learn somefins from my experience.

Before I answer your specifics, I should tell you overall, its well worth it. Go for it. Owning a house is good after all.

  1. Yes. You can negotiate. I was able to bring down my house from 300K to 289K. But then again, it may depend which metro area you are buying. I got the best deal in Houston, Texas (Clearlake). In some other areas of the country, you wont find this kinda house for a million and yet in some places (even in TX), the same may be had for like 200K. Do a market study. Find the mean prices for the houses around you. Check the trends. Normally, house prices have only increased after the 80s mess up. If you do you homework, you will be able to negotiate better.
    Dont start doing it until you have found somewhat perfect house. The way you do it, talk to agent and offer him/her your price. Don’t worry about its being ridiculous. Be very firm and ready to cut the Ernest(?) money check.

  2. taxes, neighborhood associations, maintenance, etc.

  3. A big pain. But as I said, its worth it.

  4. Right. But if the previous owner had paid some taxes or association fees, you will have to pay for the remainder of the year.

  5. www.move.com http://www.e-realty.com/splash.asp

  6. duno

  7. i think u can look at what they call patio homes. I would suggest these as well. but then again you dont like lawns, etc. :slight_smile:

  8. duno

Tell me which area you are looking to buy and I will use some of my hard earned expertise to suggest a few things.

Before you do anything, go to your lender and see how much you can spend. This is the #1 mistake that many people make. You have to know how much you can borrow. Check all the details. Interest rates and stuff. When you do get approved, get an approval letter. Now when you go to negotiate a price, they know you are not wasting their time.

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ballay balley, buy karnay house te rehna kalley kalley:)

Yar it is good idea. Owning a house will actually increase your chances of getting married:) aunties love it..larkay ka apna ghar hai ji mashallah.....khoob kamata hai:)

I was one of those people who always ridiculed people for buying a house and paying to the bank for rest of their lives. We bought the house only about 3 yrs ago while I could have bought it 5 yrs ago. but kambakhat uRr ke baith giya si main.....then finally I was pushed by relatives' taahne and I took the big leap. That was the best decision of my life. The house being in the hottest real estate market in the world, has appreciated about 55-60% in 3 yrs....almost enough to be Azkar's neibghour only using the appreciaiton:) and it is a matter of pride owning a house. I kind of have a theory that owning a piece of real estate in a country binds you to the country emotionally...they way having 10,000 of Cisco won't do.

Most of the advice is same as Azkar's. Location is most important factor in buying a house. Also in some areas town homes are to sell in which case go for a house..even if smaller.

Chann

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We are looking forward to buying a home too but in Silicon Valley (San Francisco Bay Area) a condo 2 bed, 2 bath ranges from 300K - 500K. Well single family homes range 600K - 900K. It is tough to collect half the total amount. I am thinking of buying in areas close to Sacramento (1-2hrs from SF Bay), the single family homes there cost around 120K - 200K. Is it a good idea to invest there and live here and when I pay that off, buy one in Bay Area.

What do you think?

Azkar pai what you think? is it ok to buy a home if you have got only half the total amount? pls guide me....

I am only 21

[This message has been edited by wasim21 (edited July 03, 2000).]

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Wasim, Its a good idea to pay as much cash as you can. If you have a 30 yr loan on a 300K house, you will end up paying something like 800K in the end. Wasim, some months back, I would have only invested 30% of the money in house and used the rest of it somewher in stocks or funds. Cant say that right now. Still, you should invest some in funds or stable stocks. But if you have other sources, paying 50% of the house upfront is a very good idea. Go for it. Silicon valley has a few more years before the property prices will stable. Right now these are increasing very rapidly. You made the right decision to look a lil farther than the center of action. You will get more for your money.

Wasim, talk to your baner as well. Hire a personal investment manager. They should be able to guide you more. Its OK to spend some money on these matters. Most of us dont think liek that. I used to think that I am a big tees mar khan. Its wise to hire professionals to seek expert advice.

azkar

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Roman Yara,
I have a lot exp. and can tell u a few things but i assume things work diff. in the states.
But i think its a great idea.

Advise :

  1. Be careful : first get ur fin. things on paper and see what will change.

  2. Try to hire some1 who has some technical know how. He can make a report for you.

  3. Sometimes (very common in Holland) its better to get urself an agent who does the deal for u. This can be on the basis of no cure no pay or a commission of the amount he can get of the price.

Good luck.

(PS let us know, so we can arrange a house warming party on time)

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I'm looking to buy a townhouse for now. Something with 2+ bedrooms and 1.5/1.75 bathroom <<

Roman Yar, why starting with two, go for 4 at once, you can fill them one by one....

The only suggestion I can give you is that don't buy a townhouse, the don't have resale values and in some areas it's realy hard to sell a town house. I have a co-worker here who had to file a bankruptcy to get rid of his town house.

8

Rom, it is a fairly monumental decision when you have kids, but not as hard when you are alone or just the two of you. When we bought a house, our first and foremost selection criterion was the “School District”. After that, we narrowed down the blocks which we thought were less noisy (by NYC Standard), street Parking, and finally wanting to know a little about the residents of those blocks. After that, we contacted a neighborhood realtor, and presented him with what we were looking for. Low and behold, the first house that he showed us (even tough a bit out of our range) was the one that we ended up buying. After I saw that house, two perspective buyers made offers, but lucky for us they couldn’t get a mortgage approved. I somehow knew that that house had our name written all over it.

Rom, I wouldn’t worry about how old or new the house is. I don’t know where you live, but where we are, old houses are constructed much better than the new cardboard types. Our house was built in 1926 and it has some pretty interesting details, and if there is something we want to change, it is not that difficult. Doing projects around the house is a lot easier than figuring out how to install a sound card in a PC. Take my words for that.

Azkar has given you the price idea, what you are looking for, in my neighborhood, will go for about ½ million and upwards.

Here are some rough figures:

Whatever the asking price, add 10% of that for closing costs (taxes, deeds, attorney fees etc.)
Always go with a reputable bank (Chase, Citibank, etc.) for mortgage. Because smaller banks sell your mortgages to other companies and you don’t want to be dealing with a lot of different bankers.
In my experiencing, setaside 10% of your monthly mortgage on upkeep and maintenance of the house.
Try to put at least 20% down, so you don’t have to buy PMI (private mortgage insurance)

Good luck, and keep us posted.

I agree with Chann, Azkar, It is worth it.

Pathwari yar, the houses in Holland, do they come with a blond?

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Ha ha ha, very funny, you men don't think in anything else? BTW, why there is no female in this topic?
Roman, my family is also looking for a townhouse, and I agree with Johnd: the resale value is so low that you have to be very careful before signing the contract. I think that you should go for it (sorry Johnd, I don't agree with u in this aspect), BUT my advice is: don't think about just your actual needs, consider your future needs too, you know: biwi bachche...

10

You guys are the best! Thanks for the advices.

I'm mainly looking to get a house in the same area where I'm living now. It's sort of considered one of the prestigious suburbs around Minneapolis, which kinda sucks because the real estate prices are relatively higher here.

However, there are couple of other nice suburbs, which are my second choice, and they are closeby as well (closeby to Minneapolis).

I think it was a good suggestion not to buy a townhouse. I would look into it more.

Now, one of the things that I heard is that one should never use up the whole amount of loan that one can get to buy the house. For example, if you can get 300k in loan, you should probably spend 60% of the loan to buy a house (It could be over 60%, but what's the rule of thumb here? anybody knows?).

Now, I was reading this somewhere that they have this maintenance insurance for your electric and plumbing systems etc and usually it costs around $250 per year but if you need plumbing service, the insurance would cover it. Sounds very convenient to me. Anybody knows much about it?

Ahmadi yar, what is PMI?

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Rom Yara… PMI is Private Mortgage Insurance. Lending Banks require to you have it if your equity in the property is less than 20%. It is a bullshit kinda charge. It adds about 100 $ to your monthly mortgage.

Banks only give you loan for the amount of the house price. They don’t give you extra. You can have “Home Equity Loan” after you have some equity in the house.

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What da ya think of a twin blond, ha???

http://www3.pak.org/gupshup/wink.gif

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Before I haste to reply, male or female?

14

I will agree with most of the other replies.
But then I get a real kick outta buying property....(a true die-hard desi, eh?!!).
The first property gives you the biggest buzz....like ChanMahi said...you own a piece of land on this earth which belongs only to you!!!

I bought my first property at 22 yrs. at my University town. But things are diff. here in England. Had you asked for advice on selling, then I would have nothing to say...I have never sold a property...I don't believe in it.....rent it out and it will at worst, pay for itself and provide you with a damm good pension after 25 years. All you would have invested is the initial downpayment and a few monthlies!

Yes, I know you're thinking 'I would have to sell to move to a bigger place 'cos I can only get one mortgage'!...(Not true!....there are WAYS..wink, wink!).
All legal!

I know how you feel about not wanting to mow the lawn, etc....I have felt that way always....upto now I have never owned GRASS or a garage! First house had typical desi concrete patio in rear yard, and all subsequents have been flats (Apts.).
Just bought a house in Toronto...going through closing now. I keep telling my other-half that I don't do lawns, etc. She's agreed to everything....see, there are ways!!hehehehe!

Azkar is right...Location, location, location!!! VERY important.

But, I have to disagree with everyone on one point:
If you are strapped for cash, then put down the least amount of downpayment. My dad always said to me 'a mortgage is probably the cheapest loan you will get.'
Pay-off your credit cards instead. Invest some money elsewhere...it will probably make you more than what you will end up paying on your mortgage.

Look, a mortgage will be about 7 or 8 per cent. A unit trust on average (even after volatile periods) will grow by approx. 12 per cent per annum.

EXAMPLE: $30,000 invested now in a unit trust will pay you (assuming 12% p.a. growth, compuonding) after 25 years $455,000.
That way you are guaranteed a good ammount regardless of potential property price rises or not. Even if houses do go up...that's good news..'cos you will have paid it off by then and it's all yours.

Bear in mind that human nature is such that if you were paying slightly less a month for a mortgage (having put down an extra $30,000), the saving that you make would get spent anyway, you would not realistically invest it monthly over 300 months.

Even if you did pay in your saving of $174 a month into a unit trust for 25 years, it would only make you $311,000. Thats over $144,000 less. Come back to me if this is not clear...I suspect I have left out a few assumptions here...but it's late.

Sorry to get technical on you, but I'm a numbers guy. Best of Luck.

Anokha-living-in-a-Mud-Hut-UK!

15

Roman,

Here is my advice, it is better to buy cheapest or smallest house in a very good area then buying the most expensive or a large house in lower end in a less desirable area.

Best of luck ...hope you find something you like and you can afford.

16

*Thanks Azkar pai jaan *. Bhai jaan I have thought about investing in stocks. Till know all I did was to collect money and put it in checking account. It was a bad idea but I was so busy that I never thought about investing. I am getting serious now.

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I think Anokha ne aur Rani ne nail ke head pe haThoRa maar diya hai.....two very important points.

  1. buy cheaper house in better neighbourhood rather than other way.

  2. Mortgage is the cheapest loan. All interest is tax deductible.

Chann

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[quote]
Originally posted by Roman:
** Before I haste to reply, male or female?**
[/quote]

Male, female, inbetweens.............everything man. This is Holland. No surprises over here.

Ahemedi Yara, u've a polluted mind.
But on the other hand nothing wrong wit that. ;-)

19

Thanks Anokha and Rani. Location is definitely my first periority.

It's a good point that the cheapest loan is the mortgage loan.

Another question I meant to ask people was that what are some of the most important things that you inspect when go see a house? I know the usual leak and crack stuff but what are some of the other stuff that require inspection or need attention?

20

Roman, its good you are thinking about all these things prior to buying. Its also good you are planning to buy one made 5+ years ago.

I remember when my family bought a bran new detached 2500 sq feet house just outside toronto about 12 years ago. Since we booked it a year in advance, we thought its a good investment strategy, to have a full year so prices are up before we move in. It was an absolute nightmare (because it was bran new). When we moved in, it wasn't complete. Lot of little things left (paint touch ups, driveway not paved, grass not ready, etc.. etc..) Although I was just in highschool at the time I still remember the headache. Eventually my dad had to do most of the little things left hiring a private contractor, we had no choice, we have to live there! (cheap way for the builder to get away with it). But after about 2 years, it was perfect. I would never recommend buying bran new since the real value of the home comes years later.

Other things to consider, avoid homes on major roads, which have lots of traffic. Avoid in front of schools, shopping, churches, bus stops etc... where people can ruin your lawn. Also avoid corner lots which also have traffic, accidents, bikers/people cutting across lawns. Now since we are desi, you know how are families are, we like privacy. So you may want to avoid entrances which are joined (you know how townhouses are) go for entrances where you see your neighbours garage, not his entrance. This way our women can sit outside on the porch or whatever not having to worry about privacy. Although I wouldn't want to live in a townhouse (sharing driveways, noise, congestion, etc...) . I prefer detached for more privacy. Little things to consider... hope it helps.

Salaam