Buying A House: C or D?

we found our agent based on a referral from someone my sister has worked with. we also went with her b/c she works for one of the larger real estate agencies in the area. the agency has the market share in the town where we're looking.

she's working out fine so far, but one thing i wish we did was interview a few different agents just to get a feel for different personalities, communication styles, etc. once you choose someone, they become your dedicated buyer's agent, and if i understand it correctly it can be very difficult to end the business relationship once you've committed yourself.

johnny otm. we met w/ a friend of ours here in boston who is a realtor and she went over the whole process with us, even though we are not buying in boston.

as far as lenders go, we ended up just going with our own bank to pursue it, it seemed way simpler and we know we want a traditional 30-year fixed mortgage anyways. the in-house mortgage brokers at the real estate agency were very slimy and terrible. it might simplify things down the road to have our agent and mortgage broker in the same building but we really did not get a good feeling from them.

having owned two houses now I will say that renting is so much easier

― droit au butt (Euler), Friday, May 20, 2016 8:22 AM (51 minutes ago) Bookmark Flag Post Permalink

Other than dealing with unexpected shocking rent increases and landlords who don't fix shit, which is a big part of why we bought -- stability. I actually have to say that I love co-op living because you get to build some equity but you rarely have to shell out for a repair because a lot of stuff is the building's responsibility and a lot of other stuff the handyman will do very cheaply under the table.

re: "it might simplify things down the road to have our agent and mortgage broker in the same building" - actually doing the lending through your own bank is simpler. You're only buying a house for a little while. You will be living in a house while having bank accounts for far longer.

For us, having the mortgage and bank accounts all linked means that it is all on one online dashboard; one can slosh money around among them and have instant visibility into what is being paid to whom when. Also simplifies tax time because I don't need to go to a buncha different places to gather forms.

While it's definitely nice to have our bank account and mortgage linked (coincidentally it worked out that way), it's much more important to get the best rate you can get -- it can save you a huge amount of money. I'd probably find a separate mortgage broker with a good rep, or else if you really want to go through your bank at least shop around for some competitive rates, and if you can find better bring it to your bank and negotiate with them.

We moved here for my wife's university faculty job, and her department had sort of an in-house realtor that actually used to meet with people during their on-campus interviews to tell them about housing in the area, particularly because we live 8 miles from a more interesting town in another state with wildly different laws and opinions on most things.

She was incredibly patient and got to know what we were looking for to the point that she actually steered us to a house that hadn't officially gone on the market yet which we immediately made an offer on. When we moved to a different house two years that was for sale by owner, she walked through it with us and went over some things without getting a dime out of it, so we ended up using her when we sold our first place a year later.

And we used our bank's mortgage guy because they had the best rates and it was much easier to have it all in one place but that guy's a dick and I hate working with him even though he is a genius wizard at that stuff.

Now she does things like leave girl scout cookies on our front porch with a "think of me when if you decide to buy or sell again" notes.

Generally speaking, I would say that if you're going to spend $275K in Lakewood you need to be closer to the lake that those houses on Grace, but HOLY COW that's incredible woodwork at 1422 Grace. I support capital punishment for those who paint over woodwork in homes of that age. We've had to replace a good deal of painted-over wood, both window trim and baseboards, at our house. Luckily we know a good carpenter.

1485 Marlowe -- my friend lives just south of Detroit on Lincoln (one block over from Marlowe) and likes the neighborhood -- walkable to most everything on Detroit.

The other thing I forgot to mention which may be affecting the prop taxes in Lakewood now is the massive renovation/addition to Lakewood HS.

― Jeff Wright, Wednesday, May 18, 2016 12:15 AM (2 days ago) Bookmark Flag Post Permalink

yea i totally agree about the woodwork, it is amazing in 1422 grace.

another thing i don't like about a lot of lakewood rehabs apart from tacky modern kitchens is that a lot of them paint over the woodwork, like this one, 1536 grace, http://www.zillow.com/homedetails/1536-Grace-Ave-Lakewood-OH-44107/33502609_zpid/

i mean it looks nice for sure but could you imagine that house with natural woodwork?

it's much more important to get the best rate you can get -- it can save you a huge amount of money. I'd probably find a separate mortgage broker with a good rep, or else if you really want to go through your bank at least shop around for some competitive rates, and if you can find better bring it to your bank and negotiate with them.

― www.ramenclassaction.com (man alive), Friday, May 20, 2016 10:20 AM (5 minutes ago) Bookmark Flag Post Permalink

yea agree w/ this, another reason we went with our bank is that their rates were better

some brokers wanted to charge us $400 just to give us a rate lol

yeah, I like white kitchens, but all the living room trim... I would feel so bad if that was beautiful wood and I painted it over xp

some brokers wanted to charge us $400 just to give us a rate lol

What kind of shady shit is this?

yeah shocking rent increases would be bad. France has pretty strong rules on when and how much a landlord can change the rent in a year, and it's in every contract, and we're talking like maybe 3 euros a month when our renewal comes up in August. this is one reason it's so hard to rent in France, but once you're in, you're ok. evidently it's easier to buy than rent in France for this reason, but we're a long way from that, particularly since we had like zero equity in our USA house (that hasn't even sold yet).

everybody wants some juice xp

xp yeah that's def a scam, but I'm talking about mortgage rates themselves as well as fees. A (non-shady) broker can shop around for the best rate.

yea the interest rates are ultimately the most important thing

OK I'm going to my credit union today to try to get pre-approved. Except let me make sure I understand -- by pre-approving, I am not committing myself to this lender, am I? Like, I can still shop around afterwards? I just want to have some sense of what my options are. I'm not planning to make an offer on a house, like, this week.

Or maybe I'm getting pre-qualified? I don't know what the fuck I'm doing. Can I trust my credit union to be level with me about what I'm supposed to be doing or should I approach this meeting with a posture of skepticism?

Pre-qualified is a status that no one really takes seriously.

Pre-approved is actually worth something. However, you shouldn't go around getting pre-approved at too many places, because that might ding your credit score if you decide to wait a few months and have to go through the process again. Chances are your credit union will hit you with a better rate than any dedicated commercial lender will. That's why people join credit unions.

J Fever correct - too many inquiries lowers your score. Presumably because people in bad financial situations tend to go into a frenzy where they apply for credit a lot, or they are applying to several different lenders because they're getting denied.

It's kind of understandable (on the part of credit bureaus) but it contributes to the general fucked-up catch-22 that people will lend you money only if you can prove you don't need it.

Maybe I'm dreadfully wrong about this, but I still think every institution is drawing from more or less the same pool of offers, so where you go matters less than whether you're generally comfortable with that institution.

you probably shouldn't get pre-approved unless you are looking to buy a house imminently

by pre-approving, I am not committing myself to this lender, am I? Like, I can still shop around afterwards?

depends on the lender, in my experience.

our (large commercial) bank pre-approved us but does not require us to commit ourselves to them (we are going w/ them anyways).

the very shady in-house mortgage brokers at the large real estate agency where our agent works only offered us a prequalification, and if we want a preapproval from them, we have to commit (and pay $400 to do it, and they won't give us the rate until we commit -- this is total bullshit obv so we aren't going with them of course)

we like our individual agent a lot but the agency on a whole and their mortgage services are fuuuuuuuuuuuuuuucked

also, our large commercial bank told us the following:

1) borrowers are encouraged to shop around for rates, so within a 30-day period, multiple credit inquiries will not adversely affect your credit score
2) this is only for 30 days after the first inquiry. once the 30 days are up, there is a 15-day period during which you should NOT pursue additional inquiries because they will adversely affect your score
3) once those 15 days are up, you can shop around again

Yeah, the credit bureaus will take into account some shopping around for big purchases like homes and cars. They allow clustering.

That said, applying is no fun and you should do it as little as possible.

OK so sounds like I should treat this meeting as informational and not start a pre-approval process. I don't know yet whether I want to buy a house imminently, I want to shop around a bit and see what kind of thing is available and what kind of thing I want. But I really have not the slightest clue of what our price range should reasonably be so my idea is that the loan officer at the credit union can sit down with me and my tax form and help me figure this out.

Exactly. Any fool can calculate a the principal part of a mortgage payment, but an agent/loan officer will have a better handle on the final number with taxes, insurance premium, etc. included.

I mean, let's say I decide a month from now "hey this house came on the market and I want it now." How fast could I get pre-approved?

I was at an open house this weekend and the guy said he already had an offer on the place which he had to decide on by Tuesday and I said "well, I'm not really in the market yet, I don't have a realtor and I'm not even meeting with the bank until Monday morning" and he said "you can meet with the bank Monday morning and make an offer Tuesday, easy." Is that true, is the process really that fast??

Note that this particular house isn't an issue, it was nice but I think too expensive (FSBO, asking 15% over Zillow estimate, a lot of the cost is for extra-large lot which I don't care about that much) I'm just in general trying to understand how fast I can move if we DO see the perfect place.

Also, do we believe in Zillow estimates?

Zillow estimates are janky, imo.

Pre-approval moves pretty quickly by design. Closing is when you'll get run through the ringer.

yea you can get pre-approved pretty quickly

one thing you can do in the meantime is to organize all your financial documents - tax forms, w2s, recent paystubs, bank account statements, etc. so you can provide all that stuff as soon as you need to

also whether to get preapproved in advance or once you stumble upon a house you want to buy will probably depend a lot on the housing market where you live, right? in the neighborhood we're looking in, the good, competitively-priced properties are gone with a couple days, so we definitely wanted to get preapproved beforehand so we can make an offer on the spot if we need. in a buyers' market w/ houses sitting around for a long time you can probably wait, idk

whatever was wrong with my sewer line either wasn't fully resolved or is fucked up again. having a dude with a little tv camera come out along with the heavy cleanout gear. hopefully this doesn't require drastic measures because I'm going on vacation in a week!

f u sewer line

The more I learn about this process the crazier it seems that this is the way housing works. Renting makes sense to me: There's a thing that I want (a place to live) and I pay a fee to a professional whose job is to provide that thing, just like I do for my phone and my internet.

But now instead it seems like somebody is offering me this valuable good (a place to live) in exchange for me making a colossal bet with most of my savings in a financial area, real estate, which I know nothing about.

in the neighborhood we're looking in, the good, competitively-priced properties are gone with a couple days

Yes, this is our situation too. Which I guess is good because a huge part of the anxiety around this for me is "what if I need to sell it is it going to be awful" and one sense I'm getting is that houses in this neighborhood are not hard to sell.

I guess there is an x such that when I think "the chance we want to make an offer in the next 3 months is x%" I ask for pre-approval?

The more I learn about this process the crazier it seems that this is the way housing works. Renting makes sense to me: There's a thing that I want (a place to live) and I pay a fee to a professional whose job is to provide that thing, just like I do for my phone and my internet.

But now instead it seems like somebody is offering me this valuable good (a place to live) in exchange for me making a colossal bet with most of my savings in a financial area, real estate, which I know nothing about.

― Guayaquil (eephus!), Monday, May 23, 2016 10:43 AM (4 minutes ago) Bookmark Flag Post Permalink

It's daunting and insane for sure. When I went in, I had no idea how so many people had learned to navigate the process. Once you come out the other side, though, you realize it wasn't that scary.

The thing I kept thinking about during the whole process was "If my dumb ass brother could figure this out, OF COURSE I'll be able to."

I guess this depends on which part of the country you're looking, but it's a good idea to include a termite bonding stipulation in your offer (unless the bidding gets fierce). I wish my agent would've suggested that at the time, because once the offer is accepted and you think of things like that it's too late.

I mean, you can still get it after the house is yours, but it's like $500 out of pocket when it could've been folded into the sale.

I guess there is an x such that when I think "the chance we want to make an offer in the next 3 months is x%" I ask for pre-approval?

If you've made a decision that it's time to buy and you're just looking for the house at this point, go ahead and get pre-approved. If you're still on the fence, hold off.

have them run the tv camera thing down the sewer line when you do the home inspection to check for pipe integrity imo

I might have a horse in this race, though

haha

Renting makes sense to me too. But at the end of renting something, you possess only the right to leave and go rent something else. Homeowning is plenty risky and there are lots of unknowns, but it at least offers potential for return. No amount of renting is ever going to mean that you have a sizable asset that is, in a nontrivial way, yours. I know this is corny and way dadlike, but there it is.

I will know later today if the horse is dead xp

any of you navigate multiple offer situations? i am getting the sense that we will likely have to once we find the house we want. i think we'll be competitive, we can make a large down payment or earnest money deposit, we have great credit, and we can afford more than what most of the typical houses are going for. that said there is no way we're willing to waive certain contingencies, especially inspections

treat it like an ebay auction, set a maximum price you'd be willing to pay, with the stipulation they cover extended inspections (the buyer typically pays for the basic inspection) and, if you can get it, have the closing costs rolled into their price

if you're one of the people who waits until the last ten minutes to bid on ebay and then frantically bids it up to 20% over what you wanted to pay, feel free to try that

it's also worth realizing that putting some of your cards on the table helps. if a seller needs to unload the house and one of the offers is contingent on HSA funds, which require a more stringent inspection and often make the seller fix a few things, they might accept a non-HSA offer more quickly.

Renting makes sense to me too. But at the end of renting something, you possess only the right to leave and go rent something else. Homeowning is plenty risky and there are lots of unknowns, but it at least offers potential for return. No amount of renting is ever going to mean that you have a sizable asset that is, in a nontrivial way, yours. I know this is corny and way dadlike, but there it is.

― putting the laughter in manslaughter (Ye Mad Puffin), Monday, May 23, 2016 10:08 AM (1 hour ago) Bookmark Flag Post Permalink

One of the renting-over-buying arguments you hear a lot is that you'd get better returns investing the "leftover money" in the S&P. However most people don't have the discipline to do this, and buying is a kind of forced saving.

btw my experience with Zillow estimates has been horrible -- they have continually had my place at less than one third of what we paid for it, and keep decreasing the estimate. We're not in some overheated bubble area -- it's a very stable neighborhood with prices appreciating modestly over time, and we did a lot of research on the market before we bought. Redfin, by contrast, estimates our place around 16% over what we paid for it in late 2013, which seems right.

No amount of renting is ever going to mean that you have a sizable asset that is, in a nontrivial way, yours.

Eephus: in simple terms the difference between being pre-qualified and pre-approved is that with a pre-qualification the bank will assume the numbers you give them (income/assets/debts/etc) are true and give you a price range based on those numbers. With a pre-approval they will verify the numbers you give them and check your credit history before giving you a price range. If you just want a general idea at this point, a qualification is fine.

Important thing to remember is that they're telling you what they would be willing to lend you, not necessarily what you can afford. They may tell you that they're comfortable with you spending, say, 30% of your income on housing every month, but you'll have to decide for yourself if that much works with your budget.

tbh a lot of the maintenance/upkeep issues, which end up with neighborhoods kind of getting run down, are to blame on the traditonal white flight segment who now mostly trade-up and continually buy new or near-new homes and then sell around the time things need replaced

so your maintenance load is low, but you're leaving a path of cheap townhomes/houses behind you

not that I have seen this continually happen or anything

there is an entire suburban area where a few friends lived that had this issue. townhomes are nice as a first home -- not too much space, low maintenance, some things taken care of by the HOA. they then got completely screwed when trying to resell, due to the market for townhomes drying up (this was 2008/2009ish when the market crashed) combined with the fact you could buy a brand new townhome for marginally more money

a lot of areas turn into mostly rental properties after the original owners move, which brings its own stigma when you have a neighborhood of single-family homes that are all rentals. one friend was doubly screwed in that the HOA had a "no more than two renters while you own the property" clause.

btw my experience with Zillow estimates has been horrible -- they have continually had my place at less than one third of what we paid for it, and keep decreasing the estimate. We're not in some overheated bubble area -- it's a very stable neighborhood with prices appreciating modestly over time, and we did a lot of research on the market before we bought. Redfin, by contrast, estimates our place around 16% over what we paid for it in late 2013, which seems right.

Same for me. Who knows what formula Zillow uses, but the Redfin estimate checks out just based on my own observations of looking at comparable sales in the neighborhood/couple-mile-radius over the last year.