I am about to put an offer in on a house in Madison, MS. Any advice from people that have done it before?
OT: buying a house (first time home buyer)
- Thread starter civildawg88
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Just bought a house a few months ago. 1. Make sure you have a good mortgage broker. There are usually incentives and other options available to first time home buyers. Check into an FHA mortgage, for example. 2. The actual sale price is less important than asking for cash for closing from the sellers. There's not a whole lot of difference in financing $250,000 and financing $275,000 in terms of your monthly payment but getting $10,000 in closing costs from the sellers vs. $5,000 can make a huge difference in how much money you have to bring to the act of sale/closing.
Get a Realtor, if you haven't done so. Don't rely on the seller's agent.
I'd think this is fairly obvious, but just had a cousin go through the whole thing just relying on the listing agent.
I'd think this is fairly obvious, but just had a cousin go through the whole thing just relying on the listing agent.
Find 2 houses that you like. It gives you leverage in negotiating. Realtors work on commission so the higher the sales price the more money they make. Start negotiations on the house you want, but if you can't get it for the price you want, be sure the seller knows you have another option and will walk away.
Make sure you have a good home inspector and listen carefully to what he has to say. Can save you a lot of headache and money in the future. Inspect it yourself as well. Look for door frames that have separated from floor, and look for cracks or recent repairs (with a flashlight) at the sheet rock above the corner of each and every door frame. If you see any cracks or recent repairs, it could be signs of shifting foundation. Of course, it doesn't mean that it will get any worse, that what you see, but it could. Just keep that in mind. I had a bad experience with our first house.
Unless the house is a steal, lowball the shite out of the first offer. Or offer a reasonable price below their offer but never budge from it. It's a buyer's market. If they won't come significantly off the price, move on. There's literally a thousand to choose from in Madison. And way too many of them think so highly of Madison and themselves that they WAY overvalue their house.
^This^ I recommend Rick Eades out of Jackson.
The extent to which he is obsessive about making sure that everything is inspected is a bit off-putting, but totally worth the money. You should know going in that he is going to find something wrong with the house. I have never seen or heard of a house that he has attached a completely clean bill of health to. He told me while he inspected the home I bought in Jackson that it was the most well-maintained homes he had ever seen. When we got his report back, he found the house unsatisfactory due to the conduit on the electric meter being loose and two gutter shafts being separated from the gutter.
This is what I'm looking for in a home inspector. Someone who will point out every minute detail that is wrong with the house. Some people feel differently, but I know the guy does a great job.
He's also the pinnacle of honesty. After we had moved in, I noticed something that wasn't in the home report. I asked him about it just to see if this was something that I needed to be worried about. He came over, apologized profusely, and fixed what was, essentially, just a cosmetic problem because he felt like if he had pointed it out before the purchase, I could have asked the sellers to fix it. No cost to me. Great guy to do business with.
The extent to which he is obsessive about making sure that everything is inspected is a bit off-putting, but totally worth the money. You should know going in that he is going to find something wrong with the house. I have never seen or heard of a house that he has attached a completely clean bill of health to. He told me while he inspected the home I bought in Jackson that it was the most well-maintained homes he had ever seen. When we got his report back, he found the house unsatisfactory due to the conduit on the electric meter being loose and two gutter shafts being separated from the gutter.
This is what I'm looking for in a home inspector. Someone who will point out every minute detail that is wrong with the house. Some people feel differently, but I know the guy does a great job.
He's also the pinnacle of honesty. After we had moved in, I noticed something that wasn't in the home report. I asked him about it just to see if this was something that I needed to be worried about. He came over, apologized profusely, and fixed what was, essentially, just a cosmetic problem because he felt like if he had pointed it out before the purchase, I could have asked the sellers to fix it. No cost to me. Great guy to do business with.
Several Great points of advice in this thread.
1. Use your own agent! You wouldn't go to court and use you opponents lawyer would you?
2. Home inspector: Use one from out of town. You never know who knows who if you use local.
3. Lowball! All the can say is no, right?
4. Done be afraid to ask for some things, My wife loved all the drapes in the home we bought. They were custom by a interior decorator. She also loved this Persian rug in our foyer. She got everything by including it int he offer as well as some other things.
1. Use your own agent! You wouldn't go to court and use you opponents lawyer would you?
2. Home inspector: Use one from out of town. You never know who knows who if you use local.
3. Lowball! All the can say is no, right?
4. Done be afraid to ask for some things, My wife loved all the drapes in the home we bought. They were custom by a interior decorator. She also loved this Persian rug in our foyer. She got everything by including it int he offer as well as some other things.
Don't fall in love with a house. If you can get a house you like for the right price, then that's great. But don't get so enamored with a house that you are willing to pay too much for it. Its a buyer's market, and you can find a good deal on a house that's right for you.
to follow up on some stuff:
It is a new construction home so hopefully the home inspector will not find anything and it also qualifies for the USDA rural development loan where I dont have to put anything down. I have a realtor and with new construction homes she said they usually cover all closing costs.
It is a new construction home so hopefully the home inspector will not find anything and it also qualifies for the USDA rural development loan where I dont have to put anything down. I have a realtor and with new construction homes she said they usually cover all closing costs.
I have found 2 that i really like so i'm going to hint to the realtor that if i cant get it for what i want i'll just put an offer in on the other house. The one house i really like is listed at $123/sqft, which i think is was too high. Anyone think about $110/sqft is reasonable?
Depends on where you are buying. In Highland Ridge, $123 would be outrageously high. In St. Ives it would be cheap.
^ This * 2 ^
There are several good pointers in this thread, but don't make the same mistake that I did. Buying your first home is exciting and once you find the gem that you've been searching for at an affordable price, it's easy to get wrapped up in the excitement and ignore a lot of valuable details from the home inspection process. Assuming you do appoint an agent(which I'd highly recommend), they'll typically highlight anything serious that's found during the inspection, but you still need to take a long look at it yourself. Even if no major repairs are needed, sellers almost always budget some sort of $ amount for expected repair requests from the buyers and if you don't bring anything up, you're throwing money away. It may be a new roof or it may be some minor trim repair. Either way, don't let the opportunity pass you by...
There are several good pointers in this thread, but don't make the same mistake that I did. Buying your first home is exciting and once you find the gem that you've been searching for at an affordable price, it's easy to get wrapped up in the excitement and ignore a lot of valuable details from the home inspection process. Assuming you do appoint an agent(which I'd highly recommend), they'll typically highlight anything serious that's found during the inspection, but you still need to take a long look at it yourself. Even if no major repairs are needed, sellers almost always budget some sort of $ amount for expected repair requests from the buyers and if you don't bring anything up, you're throwing money away. It may be a new roof or it may be some minor trim repair. Either way, don't let the opportunity pass you by...
If the house is in the city limits of Madison
Be sure to know if it is 16th section or not. I know tons of people who bought a house only to find out that they leased the property rather than own it. Not saying it is a deal killer, but you at least want to know. Belle Terre, Madison Oaks, Sherbourne, and others are leasehold.
Also make sure you know if it is in a FEMA flood hazard area (such as zone AE). Banks now require flood insurance even if the house is built to a height well above the BFE (unless you remove it with a LOMR-F)
Be sure to know if it is 16th section or not. I know tons of people who bought a house only to find out that they leased the property rather than own it. Not saying it is a deal killer, but you at least want to know. Belle Terre, Madison Oaks, Sherbourne, and others are leasehold.
Also make sure you know if it is in a FEMA flood hazard area (such as zone AE). Banks now require flood insurance even if the house is built to a height well above the BFE (unless you remove it with a LOMR-F)
1. Take the Trump approach "Never do a deal that you wouldn't walk away from". You'll have to calm down the wife from getting emotionally envolved. NEVER LET EMOTIONS COME TO PLAY!
2. Research your "Buyer Agent". It will have to be someone with impectable honesty. Remember even with them, the more you pay, the more they make. The commission is being paid from the Seller's proceeds and is being split with the agent that brings the buyer. It's very hard for most people to cut their own salary.
3. Before you offer, have one time when you can inspect the house without anyone else there. If other people are around, you'll feel rushed, and may miss something.
4. Do not tell your agent your max price! If you do, they will start showing you houses at 10% above that. Instead tell them that your comfort range is your max price. Keep that info yourself.
2. Research your "Buyer Agent". It will have to be someone with impectable honesty. Remember even with them, the more you pay, the more they make. The commission is being paid from the Seller's proceeds and is being split with the agent that brings the buyer. It's very hard for most people to cut their own salary.
3. Before you offer, have one time when you can inspect the house without anyone else there. If other people are around, you'll feel rushed, and may miss something.
4. Do not tell your agent your max price! If you do, they will start showing you houses at 10% above that. Instead tell them that your comfort range is your max price. Keep that info yourself.
actually most realtors are better off moving houses quickly, even if a little below value. even if the realtor works their *** off to get an extra $10K our of the house, they are only pocketing an extra $500 or so before taxes from the $10K extra they milked out of the buyer. they are better off selling the house ASAP and moving on to the next sale that grosses them thousands.
About the max price
In any negotiating situation, it's always good advice to lowball your max price.
In any negotiating situation, it's always good advice to lowball your max price.
$123 in this economy is too damn high. I'd say anything under $115 for new construction is probably in the ball park. [assumption being that you are looking at areas with above builder grade quality **** in it; e.g., granite, hardwood, higher end appliances, higher end fixtures, real wood cabinetry and finishes (not that mdf ****)]
1. Check out the neighborhood at night and on weekends. See what kind of people you will be living around.
2. Get a good home inspector and make sure your offer is contingent on the report.
3. If red clay is nearby, get a structural engineers to do a report. Foundation problems are expensive.
4. Gert a home warranty and make the seller pay for it.
5. Go with a 15 year mortgage if you can afford the payments.
6. Try to put down 20% so you don't have to pay the PMI..
2. Get a good home inspector and make sure your offer is contingent on the report.
3. If red clay is nearby, get a structural engineers to do a report. Foundation problems are expensive.
4. Gert a home warranty and make the seller pay for it.
5. Go with a 15 year mortgage if you can afford the payments.
6. Try to put down 20% so you don't have to pay the PMI..
to reply to some comments:
I am a young civil engineer so I have a guy from work going to take a look at the foundation.
I will barely be able to afford the 30 year mortgage payments as I am single (for now) so hopefully a friend will move in to help with payments
This property qualifies for 100% financing USDA rural development loan so PMI is not much and I dont have 40k for a 20% down payment
I am a young civil engineer so I have a guy from work going to take a look at the foundation.
I will barely be able to afford the 30 year mortgage payments as I am single (for now) so hopefully a friend will move in to help with payments
This property qualifies for 100% financing USDA rural development loan so PMI is not much and I dont have 40k for a 20% down payment
Sure, "any housewife can become one," and some aren't worth a damn. You don't want one of those. What you want is someone who does it every day. They know what's what in the real estate business, a heck of a lot more than your first time home-buyer, and that expertise doesn't cost you (the buyer) anything.
As for why they're worth more just because the house costs more, well, I can't really answer that. Can't answer it about waitresses, either.
Are you SURE you want to buy a house?
Based on your info, you're looking at a $200k house in Madison. Assuming that your situation may change in the next few years, you could be looking to sell said house when you get married, have kids, change jobs, etc. While you obviously don't have anything to show for renting an apartment for a few years, it's still not a bad idea for lots of folks. What you want to BE SURE to avoid is buying the house, paying mostly interest on your mortgage for the first few years, then trying to sell the house in a buyer's market and facing the potential of taking a loss.
I hate to sound like Debbie Downer, but picking a mortgage over rent isn't ALWAYS the best idea for EVERYONE. Your statement that you will barely be able to afford the mortgage payments makes me think you may be better off renting with a roommate and saving some of that cash (instead of paying it as mortgage interest, which isn't equity in a house).
I am no realtor, financial advisor, or anything of the sort.
Based on your info, you're looking at a $200k house in Madison. Assuming that your situation may change in the next few years, you could be looking to sell said house when you get married, have kids, change jobs, etc. While you obviously don't have anything to show for renting an apartment for a few years, it's still not a bad idea for lots of folks. What you want to BE SURE to avoid is buying the house, paying mostly interest on your mortgage for the first few years, then trying to sell the house in a buyer's market and facing the potential of taking a loss.
I hate to sound like Debbie Downer, but picking a mortgage over rent isn't ALWAYS the best idea for EVERYONE. Your statement that you will barely be able to afford the mortgage payments makes me think you may be better off renting with a roommate and saving some of that cash (instead of paying it as mortgage interest, which isn't equity in a house).
I am no realtor, financial advisor, or anything of the sort.
I don't think buying new construction right now is a smart idea. Kinda like buying a new car - after you move in the price has just dropped significantly. With as many good deals there are out there on existing homes, I would reconsider buying new. Heck, you can find someone trying to sell a 1-3 year old house for significantly less than $110-123 per foot. But if you are ok with knowing you will more than likely not be able to recoup the full amount of the purchase price when you go to sell, then go ahead.
In addition to the advice above, get a copy of the subdivision covenants and read them. Also check on how much homeowner's dues are.
In addition to the advice above, get a copy of the subdivision covenants and read them. Also check on how much homeowner's dues are.
If you are single, don't buy a house you can barely afford to qualify for. Hell if you are married don't do it.
If I were shopping in Madison right now I'd be looking for a foreclosure. Get one that needs some work. Hell you don't have a wife to ***** about anything while you are doing the repairs. You can get a foreclosure for tons less. Use the money you save each month on fixing it up and sell for a profit in 5 years when you get married and your wife makes you sell it.
If I were shopping in Madison right now I'd be looking for a foreclosure. Get one that needs some work. Hell you don't have a wife to ***** about anything while you are doing the repairs. You can get a foreclosure for tons less. Use the money you save each month on fixing it up and sell for a profit in 5 years when you get married and your wife makes you sell it.
Go outside the city limits and buy an old farm house with a couple of acres. You'll save 60 to 75% per square foot and the taxes won't kill you. Remodel and make improvements with the money you save. Get a roommate to split the mortgage, utilities, and provide free labor. Set the mortgage on a 15yr note. In 5 years, you should have some equity built up and all of you and your roommates sweat equity.
Lawdawg and Dawghouse are right. It doesn't sound like you're ready to buy this house. Never buy anything you can barely afford. Give yourself a little cushion. And with that little equity, you could very easily be upside down on your mortgage when you're ready to sell.
Not looking to sell when I get married. Current girlfriend has been looking with me and we are making sure we have room to expand in the future with whatever house we buy
i don't want to advise you either way, except to say to know ALL the pros and cons before you make this decision. the conventional wisdom of buying rather than renting to "build equity", for example, is pretty damn stupid and very misguided for your situation.
As a realtor and a home builder, these type of threads are always ... interesting ... to me. To say the least.
Carry on.
Carry on.
Lease to own. It's like test driving a house
Find something that's been on the market for a while, offer to lease with an option to buy. Live. Decide if you like it. Then buy or not. Make it so you can purchase at any time during the lease in case you decide early. It's amazing the things you don't notice while looking that end up bugging you.
Find something that's been on the market for a while, offer to lease with an option to buy. Live. Decide if you like it. Then buy or not. Make it so you can purchase at any time during the lease in case you decide early. It's amazing the things you don't notice while looking that end up bugging you.
