I'm buying a house soon. Help me not screw up.

[highlife]

[ QUOTE ]
Not to be a tool of popular media, but freakonomics makes some good points (IMO) on real estate agents...

[/ QUOTE ]

what were they? I didn't read the book.

[Gunny Highway]

[ QUOTE ]
Thank you for the enlightening post. Now please go away while I try to get meaningful responses.

[/ QUOTE ]

If you wanted meaningful responses, it would have been nice to ask a question in the op, or at least say what you kind of responses you wanted.

[vexvelour]

I asked a similar question a few weeks ago and 4_2_it PM'ed me a ton of awesome advice that I'd be happy to forward along. Let me know.

[Macdaddy Warsaw]

It mostly talked about selling houses as far as I can remember. The point was that getting an extra 10k for the house makes them $500 gross. Therefore, it's not worth it for them to put in extra time and money when they might only net like $200. I don't actually recall much about buyer's agents.

Also, when looking for ads, he mentions that ads with descriptive words like granite, etc. indicate a better house than things like exclamation points and superlatives.

[4_2_it]

Couple of hints:

1) Buying the smallest or least expensive house in the nicest neighborhood is better than having the biggest house in a less nice area.
2) Make sure you buy in a good school district. This is usually one of the top 2 or 3 needs of buyers with kids.
3) Get a real estate agent. The seller pays the commission, so get some one to help you with 1 and 2 above
4) Ask for copies of the last 3 months electric, water and other utility bills. Make sure you can afford the property taxes that will come with your new estate.
5) A 4 year old house is fine, in fact most of the stuff that the builder screwed up is probably fixed.
6) Don't buy a fixer-upper. It will cost you twice what you think to fix it up (Disregard if you are tradesman and can do it yourself or have union connections.)
7) If you buy a resale (not a new home) purchase a limited warranty (your realtor will have details). It will seem expensive, but if something like your a/c goes on the blink it is well worth it.

Good luck and happy house hunting.....

[kevstreet]

[ QUOTE ]
Find a neighborhood that is a bit above your means. Not a lot above, just a bit. Now check out whatever houses are for sale there that would fall into the bottom 30% or so of value for that neighborhood.

Keep doing this until you find something you love in your price range.

[/ QUOTE ]

This is sound advice. My wife and I closed on a home in July '05 that was at the higher end of what we were approved for. We were nervous to make a commitment we'd struggle with however we LOVE the house and the neighborhood. This makes cutting corners not so bad. Our hope is that we will grow in to the house w/ raises and bonuses in the future so things will eventually become easier. For now, I don't mind living for my home, it's a wortwhile investment and something I'm proud of.

[Chadt74]

"It mostly talked about selling houses as far as I can remember. The point was that getting an extra 10k for the house makes them $500 gross. Therefore, it's not worth it for them to put in extra time and money when they might only net like $200. I don't actually recall much about buyer's agents."

That was only for SELLERS AGENTS, and what it showed via data in the detroit area is that the average sales price for a realtor was 3% higher and stayed on the market for 30 days longer than non-relators.

The math to show why it is in the SELLERS best interest to just make a sell and not care about the higher prices is as follows :

Selling price of house $200,000
Commission 4%
Paid to agent 8,000
Agent gets around 35% of that or $2,800
Usually 1/2 goes to the agent's agency (ERA etc), and I don't remember the exact numbers.

Selling price of house $210,000
Commission 4%
Paid to agent $8,400
Cash to agent 2,940

So the agent gets $140 bucks for for getting you $10K more. Basically the author was saying SELLERS agents would rather make deal then try and get that extra $10K.

[ElaineMonster]

[ QUOTE ]
Couple of hints:

1) Buying the smallest or least expensive house in the nicest neighborhood is better than having the biggest house in a less nice area.
2) Make sure you buy in a good school district. This is usually one of the top 2 or 3 needs of buyers with kids.
3) Get a real estate agent. The seller pays the commission, so get some one to help you with 1 and 2 above
4) Ask for copies of the last 3 months electric, water and other utility bills. Make sure you can afford the property taxes that will come with your new estate.
5) A 4 year old house is fine, in fact most of the stuff that the builder screwed up is probably fixed.
6) Don't buy a fixer-upper. It will cost you twice what you think to fix it up (Disregard if you are tradesman and can do it yourself or have union connections.)
7) If you buy a resale (not a new home) purchase a limited warranty (your realtor will have details). It will seem expensive, but if something like your a/c goes on the blink it is well worth it.

Good luck and happy house hunting.....

[/ QUOTE ]

I agree with all of this.
But I'm wondering, why do you want to buy a house?
And think about what you'll do if you need to sell sooner than you planned.

[chesspain]

[ QUOTE ]
Let's see, more info...

I'll be 25 in 2 weeks. I'm single. I want something that's nice and will have good resale value in about 5-6 years. I'm concerned that if I get something too small, it will be harder to sell later. Also, newer houses are newer (obviously), but you get less for your money. I've seen a 1275 sq ft house for 145,570 that's brand new, and a 1600 sq ft hosue for 149,900 that's 4 years old. Are there any guidelines or simple rules for this kind of thing?

I'm sure there are little things here and there that could help/hurt me, but a lot of that is unpredictable. I guess mainly I'm just looking to not make a huge mistake. The area I'm buying in (outside Savannah, GA) is growing at a decent pace and should continue to do so since that's the only direction for things to expand.

[/ QUOTE ]

That wasn't so difficult to explain, was it? I have no idea why you didn't state all of this in your original post.

[jthegreat]

[ QUOTE ]
I agree with all of this.
But I'm wondering, why do you want to buy a house?
And think about what you'll do if you need to sell sooner than you planned.

[/ QUOTE ]

I'm moving to the area to take a new job. The area that I want to live in has very few places to rent and the rents are in the upper 700's, lower 800's range. I have a gigantic income-to-debt ratio since my car is paid off and since I'm looking to stay in this area a long time (family is there), it seems like a better plan to buy rather than rent. If I need to sell sooner (don't know why I would), it shouldn't be a problem.

Thanks for all the input so far everyone.