What do you wish you’d known before you got your first house? any regrets?
I wish I had a better handle on the utility costs. The first winter (something you won’t have to deal with) I had a heating bill of $350+, and the next month was $400+. I was not prepared for that.
It did make me much more energy conscious when buying my second home though.
Wish I’d known more about the neighbors!
I wish that I learned:
- The importance of a good school district when it is time to sell.
- Some realtors will tell you anything to get a house sold.
I wish I had researched the Master Plan of the community I bought in. I assumed (very big mistake in purchasing a home) that because I was buying in a small pocket neighborhood across the street from a park at the end of the long main road enterring/exiting the development that we would have peace, quiet and low traffic to raise a family. Seven years later my little pocket neighborhood was in the CENTER of the development and that main drag had connected to another larger road on the other end. Every day for seven years we endured construction workers driving like maniacs and concrete trucks tearing up our roads all day, every day and most weekends. Even though we could see the park and play scape from our front porch, we wouldn’t, couldn’t let our 5/6 year old cross the insanely busy intersection alone to go play with their friends that we could see when the other kids were napping.
Lesson learned: For a first home that you plan on staying in a while, buy used in an established neighborhood, or buy in an older built out section of a newer development. You will know what you are getting, there will be very few suprises and by that time the Home Owners Association are most likely in control of their own situations. Developers reserve up to 15 votes per lot owned in most HOA’s so they don’t get a bunch of Soccer Mom’s telling them what to do and when to do it.
We moved to a much more established neighborhood and built at the end of a culdesac. Two years here and no major suprises yet.
What do you wish you’d known before you got your first house? any regrets?
I wish I’d known I was getting in at the top of the market!
I really wish I’d known how much time and money a project house takes to get up to snuff.
I wish I’d known how to tile.
I wish I’d known that “needs some TLC” in realtor speak means it needs a couple of gallons of gasoline and a lighter.
No regrets however, its been an adventure and we’re happy here…broke but happy.
if this is your first house, and you are not showing a ton of money on your tax returns, you ought to inquire about low or moderate income pricing, or financing. it depends on your area, but a lot of higher priced areas are committed to offering lower income people a chance to get into the housing market affordably. let’s say a developer wants to build a complex somewhere, and need to get city or county approval, etc., and perhaps maybe even some form of city or county financing. in consideration for this some percentage of the units would have to go to those not making more than, say, $70,000 per year, and the purchase price would be a third less than the typical asking price. but you have to be a first time home buyer.
there’s a lot of that stuff out there. you’re in austin, right? so, here’s austin’s homeownership assistance page. also, look at HUD’s programs. just google “first time home buyer” and go where your mouse leads you.
Make sure everything you say on the loan application is accurate and truthful. Feds do like to go after real estate fraud (which is what they call it).
If this is your first house.
- Buy the smallest cheapest house in the most expensive established neighborhood.
- Buy a traditional home - two story, etc. Anything that is split level, tri level, etc. are hard to sell and don’t appreciate well.
- If you have a choice of two homes, and the best lot is within $20K-$40K in price, spend the extra money.
- Buy more than you can afford.
Don’t buy on a corner, taxes are higher.
Don’t buy next to a stop sign, you’ll hear every car accelerate from the stop.
Live in the house a couple months before starting to do improvments, then, do one room or one thing at a time. It can quickly over whelm you.
you are very smart for asking this question before you buy, wish i would have. my plan was to buy my house, currently in, my first, live here a few yrs, sell, move to florida.(now living in texas, this is significant.) i live in one of those planned communities. figure out, realistically, how long are you going to stay there. one of my biggest competitors rite now are the builders. if you are in a new community they are going to be building for a long time. if someone can spend an extra $10-15k and get a brand new home, you lose. real estate in texas is not a place you’re going to get rich. like many parts of the country values have gone up 10-40%+, ain’t gonna happen in texas, didn’t know that at the time. i want to sell but can’t. my neighbor has had her house for sale for a yr and couldn’t sell so she’s since taken it off the market. look at the market in your state, look at the houses in the area, now long are they taking to sell.
i’m sure you understand the ARM thing as far as loans go. they tried to shove one of those down my throat, i’m not an expert by any means, don’t do real estate for a living, but believe they are bad. your mortgage is going to go up. also my mortgage went up a couple of hundred dollars after the first yr because my taxes went up, oh yeah, after my first yr, with the tax increase b.s. my escrow was $2600-ish short. so, i had 2 options:pay the $2600 in full, which i did. or, pay it off over the next 12 mos. if i would have had it rolled into my esrow it was something like $230-ish/mo, plus the $250/mo my payment went up to make sure the same thing didn’t happen next yr, so my payment would have gone up almose $500/mo.
i’m sure i’m forgetting something, good for you for asking questions. ask as many as you can.
good luck, jason
Neighbors can make or break your ownership experience.
Home ownership is a black hole for cash. Take what you think you will need to for the house (remodel, sprucing up, furniture, window coverings, yard tools etc) and triple it.
I’m in TX, too, and I’m a little worried that the housing market here in Austin is about to topple.
There’s no way that I can live in town. Anything convenient to work is either a brand new fancy condo ($250k+) or a house ($350+ for nothing much). I’m thinking that I will have to move out - farther away from town, which is OK. I don’t commute during regular rush hours, but I would miss the ‘downtown living’ social aspect that is nice when you’re single. I can live out near some decent biking (Dripping Springs area) or near the lakes (Lakeway/Lago Vista) for pretty cheaply ($200k). Am OK with being really far away? I don’t know, but I do know (married) people who live in these areas and are happy. I work downtown, which means that I will be accessing all the downtown stuff anyway (gyms, Whole Foods, running trail, parks) before or after work.
Now, there are also a gazillion huge condo buildings going up with some awesome features. But, it’s still not like you really have total control over anything and you have to pay monthly fees. But, I’d be able to walk to work, the store, the gym, and the trails. With the amount of condos going up, I’m afraid that Austin will turn into another Miami… too many condos too fast with too many foreclosures is pushing them to a near recession… So, even though a condo would make sense for my lifestyle, I am really scared that it’s a terrible investment.
This leads me to the conclusion that I need a sugar daddy.
I’m a UT alum and only lived in Austin for 2 years (got my MS there). Even when I left in '96 it seemed like housing was pricey. I guess it has gotten worse? Either way, it’s a great place to live.
I would avoid vinyl villages if at all possible. This may be locale specific but around here they tend to get people pre-qualified who probably shouldn’t be qualified. Once they’re in the house, they can make it for 1-2 years until some unforseen expense arises. Then, they lose the house. Eventually the prices in these developments decline, because there are too many homes for sale. You often end up owing more than the house is worth. I don’t know if this is a nationwide trend or just a midwest thing, but when looking in an area of new development, be careful. These sorts of things don’t happen as easily in more established neighborhoods.
I’m fundamentally/aesthetically opposed to generic communities. With money being not much of an object, my first choice would be Travis Heights - funky, old bungalows in wooded lots with cool gardens…close to Town Lake… but that’s $400K+.
I really don’t want a new house… and I really don’t want anything generic that looks like my neighbor’s house. And I don’t want a 70’s ‘ranch’ house with 1 small window.
I think housing has gone up since you left…
I am already paying over $1000/mo to rent, so I do think it makes sense to put that money into something I can own.
If this is your first house.
- Buy the smallest cheapest house in the most expensive established neighborhood.
- Buy a traditional home - two story, etc. Anything that is split level, tri level, etc. are hard to sell and don’t appreciate well.
- If you have a choice of two homes, and the best lot is within $20K-$40K in price, spend the extra money.
- Buy more than you can afford.
Can you further explain #4? In light of someone being a first time buyer, buying more than she can afford can be very risky. Most first time buyers have very little equity to begin with. When someone buys more than she can afford and the market sees a correction, that person can end up in a negative equity situation very quickly. We have seen this in dramatic fashion in the sub-prime market of late.
Also, since the media tells us the country is so pissed off about a Republican president, it is not a reach to assume the next president will be a Democrat and he/she will raise taxes. Higher taxes will certainly hurt someone who is already in a mortgage that is more than she can afford. Also, if it is a home she is hoping to have more than a few years, then she needs to have some idea of whether or not she can make the payments once more of the money starts going towards the principle, so she is not able to deduct as much from her taxes.
Yes people can make a lot of money by purchasing homes that are $100,000 more than they can afford when the market is good. The housing market is where the vast majority of Americans have amassed and generated wealth over the last 20-30 years, but I think it is dangerous to advocate a first time home buyer purchase a place that is more than they afford.
Can you please elaborate on your thoughts? Thanks!
Think the math through completely.
Association fees, mello roos and taxes can kill you. A lot of people buy with all these additional costs added onto their mortgage every month. If you do the math you can afford a more expensive house in a neighborhood without all these fees added on. New developments often have all these additional assessments to help pay for the infrastructure of the neighborhoods (schools, greenbelts, parks, etc).
Don’t be sold on a 30 year fixed. The chance of you being in the same house 10 or even 5 years from now is minimal. Think a 5 or 10 year fixed.
Get a loan officer who you can trust - get referrals from friends.
Start tracking interest rates so you don’t get reamed in the deal. Know what the going interest rates are. The Sunday business section of your newspaper usually tracks this information.
Don’t go onto the internet loan sites that simply sell your name to brokers. The more people that check your FICO hurts your FICO.
And since we are going there, look at and clean up your FICO, it is rather easy.
My wife is in the industry, not a broker. If you have financial questions, pm me and I can hook you up with her.
Andrew
No regrets, but then we bought pre-boom so our mortgage is cheaper than it would be to rent in our neighborhood.
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Figure out what’s easy to change, and what is not changeable. We decided to deal with late 70s decor to buy in a older neighborhood because you could get 1/3 acre lots. (newer homes here are on 50’x90’ lots)
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If you can make the numbers work, go for a 15 year fixed loan. After one year, you’re paying more to principle than you are to interest, and that doesn’t happen until something like year 17+ on a 30 year note. Which is especially good in an area like Texas that has had historically flat appreciation.
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Drive down the steet and through the neighborhood during rush hour. How is access to main commuting roads? Drive through the area at 10:30pm on Friday and Saturday night.
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Good schools mater for resale even if you’re childless.
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If you buy a chainsaw, buy the biggest gas-powered one you can handle. If there’s an emergency occasion where you really, really need to use it, chances are that the power will be out, and the electric ones will be useless.
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Use an inspector that’s got ASHI certification. ASHI standards are much higher than any state requirements.
Not so much the first house, but the second one I wish I would have known my mother in law had done some of the construction work…need I say more?
~Matt
Buying more than you can afford.
My point here is that people tend to earn more as time progresses. I remember the first house I bought 20 years ago. I did not know how I was going to make the payment, but sure enough I did and as time progressed that payment became a part of my normal monthly expenses and I made do with the rest that I had. Today, the price that I paid for that home wouldn’t even buy me a 1/4 of the lot that I live on. People’s income increase over time is my point, not that people should buy a home they can’t afford to pay for even on day one.