Buying Houses Not as Easy as It Looks on TV, Duhhhh

@The Dauphine I’m at the very end (GOD I HOPE) of the most hellish transaction trying to buy an REO from Bank of America. I bought my first place in 2003 and got the 5th place I made an offer on. This one was the 8th, I think. But I’m in the SF Bay area market, which is insane, always.

@sony_b I live in Brooklyn. Something tells me buying a house is not quite the same process as buying a pair of shoes, but that’s all I really have to go on. I’ve been browsing Trulia. What should I do first? Get approved for a mortgage? Aaaagh.

@The Dauphine I’d start by checking your credit reports to see what lurks there – fix anything obvious, and figure out what to say about anything funky in the past. For money you can do a couple of things – go to a big bank (IMHO the worst option, and NEVER BofA. You would not believe. You just wouldn’t.), or try a credit union. You can also go with a mortgage broker whose job it is to find the best option for you. They can tell you how much you can afford and pre-approve you.

I started with an agent first though. I used her the first time I bought in 2003 an she was awesome. She referred us to the broker we’re using, who is also awesome. Ask for referrals from people you know who have bought recently. Or keep an eye on neighborhoods that you might want to live in, and notice when the properties get sold. I’d even just knock on the door of a place after it has sold and just ask if they liked their agent or not. Some agents are awesome. Most are idiots. Anybody who has bought a house will be able to tell you if you want to use their agent, or if they are an idiot who wasted their time.

See if your local paper has a list of properties sold by zip or city. SFGate has this: http://www.sfgate.com/homesales/ – I kept an eye on the neighborhoods I was interested in and cross referenced them against listings on realtor.com for a few months to see what was moving and what the difference between the list price and the final sale price was. I kept a spreadsheet and updated it every monday after the sales data went up so I had a pretty good idea of what I could expect to get for my money, and maybe how long it would take.

@The Dauphine YES WE CAN talk about home-buying; it’s my favorite subject. I’m on house #3 (due to relocation) and I’m 27… I have a bit of a real estate problem, honestly. I’m thatjenn on Twitter and Gmail and everything else if you ever want to talk about house-buying.

Yes, go get a credit report and then talk to a bank you like working with to get pre-approved. You can help by bringing along a copy of your credit report, your most recent pay stub (or offer letter if you just got a new job), and a quick list you’ve jotted down of balances in your accounts.

Definitely ask around to anyone you know (coworkers are great for this) to see what realtor they liked. You might also even ask them if they liked their home inspector, their bank, or any other people they worked with in the closing process. Bonus points if they worked with them in the years since the housing crash.

Also: make sure you are not planning to blow all your savings on the down payment. You will need money for closing costs. You will need money to do all the stupid maintenance things and pay deposits to utility companies and a dozen other dumb things. Home ownership looks like a deal because mortgage (or even mortgage + escrow) payments are lower than rent, but the jerky thing about owning vs renting is the occurrence of sudden, major, non-optional bills due to home maintenance issues. You may still come out ahead if you walk the line between being frugal about maintenance and not letting the home crumble due to deferred maintenance or shoddy work, but it’s a less predictable thing and having some savings is key.

@Jenn@twitter
Thank you!
I know what I want, I hate condos, and have always liked Rowhomes. I started looking around and noticed that the ones in areas I am interested in (Bushwick, Bedstuy) are divided up in to apartments. At first I was annoyed, but then I realised that living in a rowhome that I own, and being able to rent out some of the space to tenants could be cool too and maybe eventually I could renovate and use all the space myself. Who knows?
My student loans are on autopilot at this point and my credit can only get better barring any major accidents.
I talked to my parents about it and they think it’s a great idea for me to start thinking about buying, but beyond moral support can’t offer much help. I’m giving myself a year to save the down payment, and then starting to look seriously.
A coworker of mine just bought a house, and I want to pick her brain about it, but don’t quite know how to broach the topic. I know she was looking for a very long time, is quite picky, and did it without a broker.

@The Dauphine Sounds awesome! I’ve also done the rent-out-space thing (with and without shared living space), and it has its pros and cons, mostly pros if you vet people well. It’s best if you know you can afford to make payments for a few months without a tenant (or really, just be able to make payments forever without a tenant).

Most people who’ve just bought a house will be open to talking a little about their experience, especially since the details of interest to you aren’t really financial ones. I think it’s probably totally acceptable to shoot your coworker an email to say, “Hey, I heard you bought a house recently – any advice for me on what to do or avoid?” She can easily go “No, not really” or open up a dialogue about it then.

@navigateher That happens so often on Property Virgins. I love yelling “you can get those installed for less you idiots!” at the tv.

@navigateher I think they usually think that they’re not going to have to do ANY work on this more-expensive house because it’s obviously PERFECT, and so they believe they can afford a higher payment… except that no house is perfect, and they’re going to really feel that crunch and ALSO have no disposable income with which to make improvements or do maintenance.

@Jenn@twitter And even if the house was perfect, how is the absolute maximum price either absolute or maximum if you can suddenly afford to pay over 10% more if the countertops are right and its THE DREAM HOUSE OMG LOOOOOOVE? It amuses me how people in that show reject perfectly good houses over something like “the wallpaper in the kitchen wasn’t really our taste” or “the backyard is not big enough for both a large patio AND a pool” (which you can’t afford to build anyway because you’re maxed out buying the house). Also the couples with a budget of $150,000 in somewhere like SoCal that feel nothing’s good and large enough for them? I think the estate agent (broker? what do you call these people?) person has a patience of an angel sometimes.

@navigateher Yeah, occasionally I yell at the TV screen, “Look, the market didn’t crash THAT badly… you’re not going to get what you want for that price!”

Maybe it’s just a leftover mindset from renting, where everything needs to be right or it never will be. As a renter, you tend to think of things like flooring, countertops, appliances, and sometimes even paint as basically permanent and set. As a homeowner, for me, at least, I’m happy to get a house where those things may be a little out of date because the price will be lower and I’ll get exactly what I want, one thing at a time (assuming it’s livable as is – I’d probably do the flooring before moving in though!).

@wallrock I love my house, but I wish I’d been less eager to buy when I got my house. I bought at the exact top of the market, and I bought assuming I could sell in ~2-3 years for a profit to cover all the work I did on it. I’m probably in this house for the next 10+ years, in large part because it’s lost so much value (and my life plans have also changed, making that a more realistic option). It’s not a bad thing to be cautious!