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Reasons to Think Twice Before Buying a House - 10/22/2009 3:30:45 PM
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Fritzpw_Admin
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quote:
Reasons to Think Twice Before Buying a House
Steve Diggs - No Debt No Sweat! Christian Money Management Ministry
Americans love their homes. My involvement in the real estate business over the last 30 years has taught me a lot. Frequently as I present the No Debt No Sweat! Christian Money Management Seminar people have questions about real estate: "How much can I afford?" "Which is best: a 30-year or a 15-year mortgage?" "What should I know before I buy my first home?"
These are some things that would concern me about a house. These don't necessarily have to be red lights to your purchase plan, but they should serve, at least, as yellow caution lights.
Read the rest of Reasons to Think Twice Before Buying a House
Some excellent tips in here... what are some things that would make you think twice before buying a house?
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fritz@salemwebnetwork.com
Read today's Bible verse from my favorite online Bible
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RE: Reasons to Think Twice Before Buying a House - 10/22/2009 7:06:03 PM
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Mollymouser
Posts: 3889
Joined: 4/18/2005
From: california, land of the happy cows
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The biggest, most expensive home in the neighborhood. We didn't buy the biggest or the most expensive home in our neighborhood -- there are at least two floor plans that have more square footage, and a number of homes have significantly more (easily visible) upgrades. We're not the smallest or cheapest home, either. I'd say we're in the top third.
• Homes that are close to property zoned for retail, business, or other non-residential purposes. We're smack-dab in the middle of a strictly residential district, and we bought in the area that feeds into the "best" high school (academical score-wise) in the school district.
• Houses with odd or unusual design treatments. There's really nothing weird or unusual about our home. We have enclosed both backyard covered patios ... but those could easily be undone by anyone who didn't want them enclosed.
• Areas where there is little or no code enforcement. We are up to our ears in Code Enforcement ... some of it helpful, some of it silly. (For example, we have to hide our garbage cans and there's a 9pm garbage can curfew on trash day.)
• High-density areas. We're not in a high density area.
• Lifestyle concerns. We're about 30 minutes from the airport -- which is too bad since that's where my wonderful DH works. I'm married to a pilot, airplane noise doesn't bother us!
• Areas that are prone to flooding and other natural disasters. We have flood insurance, but earthquake insurance didn't cover enough to make it worth the costs. Pretty much all of California is considered to be an Earthquake Zone.
• Houses that are functionally obsolete. We have four bedrooms and three bathrooms. We have a standard 2-car garage, attached to the house. We have central heat and air, plus a whole house fan and ceiling fans. We have dual pane windows. We have a swimming pool and a large fenced yard. I don't think anyone would say our house is functionally obsolete.
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RE: Reasons to Think Twice Before Buying a House - 10/22/2009 7:20:03 PM
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Mollymouser
Posts: 3889
Joined: 4/18/2005
From: california, land of the happy cows
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What advice would I have for people trying to decide what house to buy?
1. Make sure that you can afford the house. Do NOT overbuy. Do not get talked into getting more of a mortgage that you need. Do not get an adjustable rate mortgage. Don't forget to consider the cost of property taxes, a home warranty, homeowner's insurance and flood insurance -- as well as utility costs -- when examinining your budget and selecting a home.
2. Check out and compare schools and school districts. Even if you don't have children, the next person to buy your home may ... so what schools/school districts you choose can make a difference. Where is the nearest elementary/primary school? And don't just go by the school's reputation, check the test scores.
3. Go online and check to see how many Registered Sex Offenders are in the neighborhood. This information should be available in most communities -- call the non-emergency number of the police department if you can't find it online. In some areas, you can also get information about crime and crime statistics from the local police department.
4. Be aware of city boundaries. There can be a large difference in property taxes, zoning ordinances, even the cost of trash pickup between two adjacent cities or even cities/counties. If this sort of thing matters to you, be sure and know where the house falls. This will also impact who you can vote for in elections, and may also determine your eligibility to run for office. (Hey, ya never know!)
5. Check out the neighborhood on Friday and Saturday nights. Spend a few hours and see what weekend evenings are like in the neighborhood.... most places look peaceful on Tuesday mornings, after all. If you see some neighbors out and about in the daytime, stop and talk to them and ask about the neighborhood -- many people are willing to chat about this sort of thing.
6. Look around carefully. If every house on the street has bars on the windows -- that tells you something about the neighborhood. Are there dogs running loose? Are there chickens running around? Is there trash in the gutters? Are homes tidy and well-manicured? Do you see beer bottles and cans in people's yards? Are front yards fenced? Do you see boarded up windows? Dead lawns? Graffiti or gang tagging? Don't forget to read the bumper stickers on people's cars .... THAT can be verrrry enlightening.
7. ZILLOW. Go online to Zillow and see what the people selling the house bought it for, and when. Check to see how much everyone else on the block paid for their houses, and when. (I wouldn't rely on Zillow for pricing of homes and home values, but it can give you some interesting facts about the neighborhood!)
_____________________________
MARRIED TO A MILITARY PILOT ~ PLEASE PRAY FOR OUR TROOPS!
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RE: Reasons to Think Twice Before Buying a House - 10/22/2009 10:08:56 PM
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relady
Posts: 688
Joined: 4/11/2005
From: Greater St. Louis Metro
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quote:
7. ZILLOW. Go online to Zillow and see what the people selling the house bought it for, and when. Check to see how much everyone else on the block paid for their houses, and when. (I wouldn't rely on Zillow for pricing of homes and home values, but it can give you some interesting facts about the neighborhood!)
Harvie, I agree with all your advice but this one. Zillow is absolutely the worst. They report re-fi's as sales and they are consistently over or under in their estimates of housing worth. I would recommend that people go straight to the tax records and see if there is a recorded sale price there, and if they aren't sure, to check with a lender or Realtor who would know whether they are looking at a sale or a second mortgage. Realtors can check the MLS for several years back to confirm a sale, if it wasn't a FSBO. Other than that, your advice is spot on, lady!
Edited to add....Oops, I just saw what you said about Zillow and home values and I agree with you. However, I have seen them, on more than one occasion, report a refi as a sale making it look like someone got an unbelievable deal on a house, LOL.
< Message edited by relady -- 10/22/2009 10:15:12 PM >
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RE: Reasons to Think Twice Before Buying a House - 10/23/2009 5:47:03 PM
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ctpruitt
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The payments are the biggest reason I never have. When I got married, we were under pressure from family:
"Buy a house! It's and investment! It does not matter if you have to spend 65% of your income! It's a house...The American Dream, etc".
Well, I learned from watching some of those same family members that the "American Dream" can quickly turn into the "American Nightmare". My mother bought into that at the age of 52 and signed a 30-yr plan 'cause "It's a house" and now she will have to work until she is 82 to pay for it...which will never happen. She sees that now. All that money she has paid in ill go to waste.
My wife's nephew did it right: starting when he was 18, he began saving money for a house. As his income went up, he put a higher percentage of it into savings. Over a period of 7 years, he bought the land and he and his brothers built the house. It took 5 years to complete, because they could really only work on it on the weekends. Now it is done. Completely debt free. Does not owe a mortgage at all.
From watching my mother, I learned about a few mistakes she made:
(1) No down payment. In her case, she didn’t want to pay $650 for an apartment. So she rushed into buying a house impulsively.
(2) She waited too late in life to buy with no down payment. If you are planning no down payment, better sign that 30 years of your life while you are young enough to work for a living. My mother is over 60 and has just a few years of work left.
The worst part about my mother’s situation is that 5 years ago she lost her job she had for 15 years and was forced to take travel assignments with a medical agency. They pay good money: she averages $34 an hour per contract…but she is constantly traveling and and not staying in her house. She has paid $48k (+utilities) for a house she cannot live in. She has been talking to Grady Hospital in Atlanta about a job, which would be great since her house is just 30 miles from there. She has spent 3 months in the last 5 years in
her house.
The best thing I learned about renting is that if I can’t pay, I can leave. You can’t do that after signing the line after buying a house.
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RE: Reasons to Think Twice Before Buying a House - 10/23/2009 8:01:21 PM
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ofa23
Posts: 364
Joined: 4/19/2005
Status: offline
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quote:
ORIGINAL: Harvie
What advice would I have for people trying to decide what house to buy?
1. Make sure that you can afford the house. Do NOT overbuy. Do not get talked into getting more of a mortgage that you need. Do not get an adjustable rate mortgage. Don't forget to consider the cost of property taxes, a home warranty, homeowner's insurance and flood insurance -- as well as utility costs -- when examinining your budget and selecting a home.
2. Check out and compare schools and school districts. Even if you don't have children, the next person to buy your home may ... so what schools/school districts you choose can make a difference. Where is the nearest elementary/primary school? And don't just go by the school's reputation, check the test scores.
3. Go online and check to see how many Registered Sex Offenders are in the neighborhood. This information should be available in most communities -- call the non-emergency number of the police department if you can't find it online. In some areas, you can also get information about crime and crime statistics from the local police department.
4. Be aware of city boundaries. There can be a large difference in property taxes, zoning ordinances, even the cost of trash pickup between two adjacent cities or even cities/counties. If this sort of thing matters to you, be sure and know where the house falls. This will also impact who you can vote for in elections, and may also determine your eligibility to run for office. (Hey, ya never know!)
5. Check out the neighborhood on Friday and Saturday nights. Spend a few hours and see what weekend evenings are like in the neighborhood.... most places look peaceful on Tuesday mornings, after all. If you see some neighbors out and about in the daytime, stop and talk to them and ask about the neighborhood -- many people are willing to chat about this sort of thing.
6. Look around carefully. If every house on the street has bars on the windows -- that tells you something about the neighborhood. Are there dogs running loose? Are there chickens running around? Is there trash in the gutters? Are homes tidy and well-manicured? Do you see beer bottles and cans in people's yards? Are front yards fenced? Do you see boarded up windows? Dead lawns? Graffiti or gang tagging? Don't forget to read the bumper stickers on people's cars .... THAT can be verrrry enlightening.
7. ZILLOW. Go online to Zillow and see what the people selling the house bought it for, and when. Check to see how much everyone else on the block paid for their houses, and when. (I wouldn't rely on Zillow for pricing of homes and home values, but it can give you some interesting facts about the neighborhood!)
Great advice! Thanks to the Megan's law website, checking out how many sex offenders live within a one mile radius of where someone lives is very easy. There are waaaay too many around my area!    I don't think it was possible to check on that information 8 years ago when the house was purchased.
_____________________________
In essentials; Unity (The Nicene Creed)
In Non-Essentials; Liberty (Everything Else)
In all things; Charity
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RE: Reasons to Think Twice Before Buying a House - 10/24/2009 2:12:06 AM
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relady
Posts: 688
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From: Greater St. Louis Metro
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quote:
Thanks to the Megan's law website, checking out how many sex offenders live within a one mile radius of where someone lives is very easy. There are waaaay too many around my area! I don't think it was possible to check on that information 8 years ago when the house was purchased. If you live in a metro area, it is nearly impossible to find an area that is completely sex-offender free. I've checked some of the best of the best areas in St. Louis and there are still offenders living and/or working nearby. Also, keep in mind when looking at these lists that there are people on there who aren't truly dangerous pedophiles. They are a tool, and a good one especially if you have young children, but I wouldn't NOT buy a house I loved because there was an offender living 2 blocks away. Next door or across the street? Maybe. I just know those lists are filled with people who really should not be on them, as well as people who should be and it's good to keep that in mind.
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RE: Reasons to Think Twice Before Buying a House - 10/26/2009 1:11:43 PM
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Simway
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Yes do think about it twice before buying a house.
First off of course is can you really afford it? And by afford I mean can you swing the monthly mortage payments, along with the power, phone, cable, water and whatever else monthly bill you will have to pay?
Then there is the matter of keeping the house up. If the water heater goes out, who, not the landlord will have to replace it, same holds true for the heating and cooling system and long with the leaking roof should it start to leak. And sooner or later the roof will have to be replaced. Also the gutters, and downspouts. Also painting will have to be done at some point, and applances replaced or repaired these things go with home owning. There are of course other things that will require money for one reason or another. So...think now about what you can do as far as repairing things that go wrong around a house. If you're not a handy man, then you will have to hire the work done, and that doesn't come cheap. Maybe renting is the best , owning isn't for everyone. Think it over.
Simway
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RE: Reasons to Think Twice Before Buying a House - 10/26/2009 2:08:49 PM
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clydewolf
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Simway,
That is a good list...
When you are a renter, who pays for repairing/replacing those items?
The landlord may make the arrangements and write the check, but the money comes out of the renter's pocket - probably not all at once but the renter pays the bill.
As a landlord, the rent is determined based on some repairs and improvements that will need to be made each year. Some years we spend less than planned, some more than planned. But the account is funded through the rent payment.
With some planning and budgeting, many folks can afford to make a home purchase. They may even reduce their income tax bill.
< Message edited by clydewolf -- 10/26/2009 2:15:06 PM >
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 9:21:23 AM
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Consecrated2God
Posts: 4910
Joined: 4/4/2005
From: Formerly Jesus Land
Status: online
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We just bought a house. We got a really good deal--we just couldn't pass it up. It needed work, so we took out a construction loan and we've almost finished up the work.
The biggest, most expensive home in the neighborhood.
It's the biggest, but it was very cheap. We bought it for $29,000
Homes that are close to property zoned for retail, business, or other non-residential purposes.
It's right next to a gas station, but we don't mind that. It probably cuts down on the resale value, but our home is still worth more than we paid for it.
Houses with odd or unusual design treatments Nothing weird about it.
Areas where there is little or no code enforcement I don't think there are any codes around here, but most of the neighbors in the immediate area keep things nice.
High-density areas It's a small town.
Lifestyle concernsJust the semis from the gas station next door, and some traffic noise, but this is a solid old house and pretty sound-proof.
Areas that are prone to flooding and other natural disasters We did have a tornado roll through here early this summer. We have no basement, but this is a very solid house. We didn't even know it was storming.
Houses that are functionally obsolete We are fixing that. 
(from Harvie's list)
Make sure that you can afford the house. Do NOT overbuy.
We didn't. With the mortgage, utilities, insurance, etc., we'll still be paying substantially less than we would if we tried to rent a house this size. And that's not even counting utilities on top of rent!
Check out and compare schools and school districts. Everyone around here says the schools are great. We homeschool, so I have no personal experience with them.
Go online and check to see how many Registered Sex Offenders are in the neighborhood.
That I did not do.
Be aware of city boundaries. I know we're in the city limits
Check out the neighborhood on Friday and Saturday nights.
I love our town.
Look around carefully. Well, it's kind of a redneck town--people call it Jaytucky for short. But the people are nice and even if they do let their dogs run around, they don't break into your houses.
_____________________________
"A faith that can be destroyed by suffering is not faith."--Richard Wurmbrand
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 10:32:58 AM
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Simway
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Clydewolf:
The Landlord does make the repairs and pays for them. You are right, these cost are considered in the rent, and will at some point cause the rent to go up. If a person is on a least, this will most likely happen at the end of the lease. If by the month, then it's whatever the landlord decideds to do. If at the end of a lease, the tentent moves out , then the next renter will be paying the cost. Most of the time, when one party moves out , the rent goes up anyway, This is one way the landlord makes money, and if handled right, will have money to help make repairs/ replacementns.
Simway
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 11:57:25 AM
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Mollymouser
Posts: 3889
Joined: 4/18/2005
From: california, land of the happy cows
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quote:
ORIGINAL: Consecrated2God
We just bought a house. We got a really good deal--we just couldn't pass it up. It needed work, so we took out a construction loan and we've almost finished up the work.
The biggest, most expensive home in the neighborhood.
It's the biggest, but it was very cheap. We bought it for $29,000
Homes that are close to property zoned for retail, business, or other non-residential purposes.
It's right next to a gas station, but we don't mind that. It probably cuts down on the resale value, but our home is still worth more than we paid for it.
Houses with odd or unusual design treatments Nothing weird about it.
Areas where there is little or no code enforcement I don't think there are any codes around here, but most of the neighbors in the immediate area keep things nice.
High-density areas It's a small town.
Lifestyle concernsJust the semis from the gas station next door, and some traffic noise, but this is a solid old house and pretty sound-proof.
Areas that are prone to flooding and other natural disasters We did have a tornado roll through here early this summer. We have no basement, but this is a very solid house. We didn't even know it was storming.
Houses that are functionally obsolete We are fixing that.
(from Harvie's list)
Make sure that you can afford the house. Do NOT overbuy.
We didn't. With the mortgage, utilities, insurance, etc., we'll still be paying substantially less than we would if we tried to rent a house this size. And that's not even counting utilities on top of rent!
Check out and compare schools and school districts. Everyone around here says the schools are great. We homeschool, so I have no personal experience with them.
Go online and check to see how many Registered Sex Offenders are in the neighborhood.
That I did not do.
Be aware of city boundaries. I know we're in the city limits
Check out the neighborhood on Friday and Saturday nights.
I love our town.
Look around carefully. Well, it's kind of a redneck town--people call it Jaytucky for short. But the people are nice and even if they do let their dogs run around, they don't break into your houses.
Wow .... you can't buy houses for that low here in California! You can, of course, buy CARS for that price, though!
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 12:40:35 PM
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Consecrated2God
Posts: 4910
Joined: 4/4/2005
From: Formerly Jesus Land
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Even around here, it's hard to find a house for that price, unless it's a foreclosure and falling down. This one needed some work, but it appraised for $53,000 even before we bought it for $29,000. I can't wait to see what it appraises for when we finish the work and get the loan transferred to a regular mortgage. The gas station next door offered the owners $75,000 for it last year, and they wouldn't sell. Then when they wanted to sell, they couldn't, because housing prices were so low.
_____________________________
"A faith that can be destroyed by suffering is not faith."--Richard Wurmbrand
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 2:13:39 PM
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GroupW
Posts: 2531
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From: Up in the hills of Colorado (very BIG hills...)
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Unreal!
I can't even build a garage here for $29k. I bet I'd have to spend $3k just to get through the permitting process.
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"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 2:38:49 PM
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Consecrated2God
Posts: 4910
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From: Formerly Jesus Land
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Here are some pictures of our house after we bought it. I haven't yet taken pictures of all the work we've done on it. LINK
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"A faith that can be destroyed by suffering is not faith."--Richard Wurmbrand
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 3:08:33 PM
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furrypurrykitty
Posts: 138
Joined: 4/8/2005
From: Home of the Corvette
Status: offline
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I work for a mortgage company, and the knowledge I've acquired through my job has made me think twice about buying a house. Not only do you need to make sure you have money for the mortgage payment and maintenance, but also for property tax and insurance. Some people think that if they have a mortgage with an escrow account for taxes and insurance, and they have a fixed rate, that their payment won't change. The fixed rate applies only to principal and interest, which do remain the same, but if the homeowner's insurance company or tax office raises insurance premiums or taxes, then the mortgage payment is going to go up. And property tax and insurance have a tendency to increase, not decrease.
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RE: Reasons to Think Twice Before Buying a House - 10/27/2009 11:08:14 PM
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relady
Posts: 688
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From: Greater St. Louis Metro
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quote:
And property tax and insurance have a tendency to increase, not decrease They do. However, after almost 15 years of home ownership I can say with some authority that in my neck of the woods, they go up more slowly than rent. Around here landlords raise the rent every year by anywhere from $10 to $25 per month, just because. And many of them don't do much in the way of repairs or upkeep from what I can tell. I'm sure there are exceptions.
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RE: Reasons to Think Twice Before Buying a House - 10/28/2009 2:55:38 PM
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APZR
Posts: 1064
Joined: 4/18/2005
From: GA
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If buying, you have to make sure you can truly afford it. That's what I enjoy most... helping people buy foreclosures, get them remodeled, and know that they can afford it. As a real estate broker, I won't put my buyers in houses they can not afford. It means getting deep into their personal finances, and some are not so comfortable with that, but I like to make sure they can make the payments, pay insurance, pay taxes, as well as anticipate an annual 2% increase for taxes and maintenance. I use 2% as a rule of thumb for annual increases as that seems common in my years of experience.
Renting is not an all safe situation either. Your rent will go up as expenses go up; your rent will go up with increased demand; and in rough times such as these, you can pay rent only to be evicted or not have the lease renewed because the landlord didn't make the payments, losing the property to foreclosure.
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RE: Reasons to Think Twice Before Buying a House - 10/28/2009 3:17:13 PM
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peace77
Posts: 273
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quote:
Around here landlords raise the rent every year by anywhere from $10 to $25 per month
The landlords that I was working for would raise rents from $25 - $50 or $60 per month at the anniversary of the lease.
They figured it was cheaper than staying in a hotel. They didn't understand that no one can afford to stay in a hotel all the time.
Peace,
Anne
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RE: Reasons to Think Twice Before Buying a House - 10/28/2009 5:41:49 PM
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relady
Posts: 688
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From: Greater St. Louis Metro
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quote:
The landlords that I was working for would raise rents from $25 - $50 or $60 per month at the anniversary of the lease. Wow, that is a lot. I think the most mine ever went up in one year was $25, but my house payment never - even with tax & insurance increases - went up that much.
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RE: Reasons to Think Twice Before Buying a House - 10/28/2009 9:55:26 PM
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peace77
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It's an expensive area to live. However, turnover was high too. Long term tenants would either leave for cheaper places or buy homes.
Peace,
Anne
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Raise money for your favorite charity or school just by searching the Internet or shopping online with GoodSearch - www.goodsearch.com
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RE: Reasons to Think Twice Before Buying a House - 10/29/2009 10:18:09 AM
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WalkingwithHim2
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I would also add to consider if the house will still fit your needs in the next 15 - 30 years.
I think bi and tri-level homes are beautiful but I knew that I wasn't going to be able to go up and down 2 - 3 flights of stairs everyday or so to do laundry...etc.
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RE: Reasons to Think Twice Before Buying a House - 11/5/2009 8:49:34 PM
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clydewolf
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Extension of First Time Home Buyer Tax Credit
Being true to form passing legilation at the last minute, the Senate and the House have passed the Extension of the First Time Home Buyer Tax Credit. This bill extends the time to April 30, 2010 to have a signed sales contract, and closing by June 30, 2010. The time is longer for military personnel.
There are some adjustments in this bill that require the First Time Home Buyer to be age 18 to qualify (there are some exceptions to that age requirement too).
The income limits have been raised to $125,000 for a single filer, and $225,000 for joint filers.
There is a new provision in this bill that gives a tax credit of up to $6,500 for a homebuyer that has been in their current home for 5 consecutive years.
The tax credit is a refundable credit, meaning the amount of the tax credit that is not needed to pay income tax is returned to the tax payer.
President Obama is expected to sign this legislation tomorrow.
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RE: Reasons to Think Twice Before Buying a House - 11/11/2009 12:43:42 PM
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doinkdom
Posts: 5589
Joined: 4/12/2005
From: The higher lowcountry
Status: offline
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We're leasing our home right now, but look forward to the day we'll be buying it. We just love this house, the area and everything.
The market right now will not allow the actual homeowner to make any money and we totally understand that, so we are waiting for it to get better and then we'll move forward with a fair deal for all.
My husband commented the other day that he'll need to learn about some home maintenance because once we buy, it's all on us. No more callin' Mr. Landlord... 
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Rest assured, dear friends, that where your pleasure is, there your heart is.
- Charles Spurgeon
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