home buying questions

[jbrentn]

my wife and i are beginning to search for a home to purchase. this will be the first one either of us have bought. at this point we are probably about 12 months out, so this is just preliminary research. i'd like to hear and gain knowledge from you guys' personal experiences. tell me about the pro and cons of buying from home creations, ideal homes, homes by taber, etc. any problems with them? what other reputable builders are there in the yukon/mustang/piedmont/north okc area. who would you recommend?

we'd like new, but would entertain buying a home built probably 2005+. should we go that route, can you all recommend a good real estate agent to work with?

also, give me a list of things that i should look for as potential red flags as well as questions that i should ask regarding construction etc.

thank you all

 

[Chief Sapulpa]

First and foremost, get prequalified for a mortgage for the price range home you wish to purchase. Depending upon your salary/wages ask about a rural development loan.

 

[JPK]

At the risk of sounding like a wet blanket - what might be even more important are the hidden financial requirements of home ownership. In addition to making the "Big 4" monthly payment (Principal, Interest, Taxes and Insurance: PITI) you'll also need to figure on the utilities (gas, electric, water, trash, COX / satellite services, etc); regular maintenance and upkeep (lawn / landscape, every day repairs like paint, broken windows, leaky sinks and water faucets, dishwasher, laundry washer / dryer) and then the major repairs / renovations (roof / shingle replacement, central heater and air conditioning replacement). The more money you can put up for a down payment, the more likely the lender will be to issue the loan and at a better rate.

Forewarned is forearmed.

 

[AirMech74]

This can be a grueling process, but worth it if you find that one house that both of you love. My wife and I looked for almost 2 yrs off and on...we weren't married at the time and had 2 homes to sell, now we are down to just one...but we ended up going with a custom builder and are in the process now but that's a different story.....

Chief Sapulpa gave some good advice, I know you said you are about a year out, but it sucks when you find a house that you both really really like only to find out that it's not within your means. Shop within your means.....There are so many builders out there...it all just depends on what you like.

The one thing that I look for...it's a pet peeve of mine...I drive down through a potential neighborhood on weekend nights and weekends...I hate it when everyone parks in the streets....it just bugs the hell out of me when you turn down a street and can barely drive down the road due to all the cars parked in the streets.....and I also hate retaining walls that divide a property.

 

[Danny Tanner]

First and foremost, get prequalified for a mortgage for the price range home you wish to purchase. Depending upon your salary/wages ask about a rural development loan.

I agree that this is one of the first things to do when it comes to actually getting the ball rolling, but with a window of 12 months out I feel that right now you'd be best to polish up your credit while there's still time for your good financial behavior to boost your credit availability. Whether this is advice others would recommend or not, I waited until it was time to go shopping before I got pre-approval, that way I knew to shop within my means. Plus, I believe the rate we were approved for was only good for 90 days.

There aren't many answers here so far, but some great advice already. Like JPK said, there are "hidden" costs. Some times, especially if you're buying brand new, the house will not come with an oven, a fence, garage door opener, etc. This will be up to you to pay for out of pocket. Great for negotiating a lower price on the house, but with everything else you're dealing with, it's just added stress. If you don't already own major appliances, you need to count on buying everything. Several grand for a washer, dryer, refrigerator, stove, and possibly a dishwasher kind of stings when you just dropped several to tens of thousands of dollars to close.

Be aware of what an HOA is and isn't. Unfortunately, our neighborhood is an HOA neighborhood. Fortunately, our HOA president enjoys Miller Lite and Chicago Cubs, so he and I get along great. Even still, I haven't heard of anybody having any problems out of our HOA in the 4 years we've lived there. Like many HOAs, we're restricted on what we can and can't do on our property, but there are a few houses that violate some of these rules. However, nobody makes a habit of it and I believe that's why we never see any mention of this in our newsletter, but this could be changed overnight with new HOA board members. From my research when looking for our first home, it seems that we're extremely lucky when it comes to our HOA. Our benefits far outweigh the $250/year fee. There was a house that made our top 5 list, but one of the major negatives was the $500/year HOA fee. Not only did that cover for a lawn crew to mow my front yard, it also covered a lawn crew mowing my back yard. Like hell I want somebody mowing my front yard for me and mowing my back yard isn't even a consideration. So no thanks on that house.

When it comes to shopping, make a check list of what you and your wife want in a home. Being a first home for you two, it might be perfect for the first couple of years, but you'll eventually find things that you wish were different that you cannot change. Prioritize the items on this list and try to satisfy this list the best you can within your budget. I got the large back patio that I wanted, but I'd kill for a front porch that's big enough for two chairs and a small table or two.

Depending on the type of loan, 20% cash down will allow you to obtain a better mortgage, as you wouldn't have to pay PMI. Don't fret, though, as once 20% of your principle is paid down, you no longer have to make the monthly PMI payment.

There's a realtor or two on board here, but I've never dealt with them. We had some hesitation, but being our first home we decided to go through a realtor. He was a great guy who actually listened to us, despite what we heard about realtors, and was in constant contact with us and we never had a problem with him returning our phone calls. He called us for the next couple of years every couple of months to make sure everything was still going great. I'm sure his way of selling his name, but hey, at least he wasn't corny about it. I'd be more than happy to give you his info. He used to work with the local media and had some connections. He actually ended up selling us the house that Bob Barry Jr and his wife had built in 2000. Pretty cool buying his old house, but pretty weird knowing that my balls are now scrapping along the bottom of the same tub as his old balls. Any way, this realtor was the #1 rated realtor in the state either at the time we bought from him or the time we discovered his superiority. By what standards, I don't know, but it says something about him.

 

[makeithappen]

We just purchased a new home this summer. My wife and I had already purchased houses separately prior to meeting each other, so we started making a list of needs vs wants. Things like the master bath, did it have to have a garden tub, two sinks, did we want the other bedrooms on the same side of the house as the master, size of the kitchen, etc. Once you have that list, you have a great understanding of what both of you want. We used Rhonda Miller, with Churchill Brown, out of south OKC. She was extremely helpful and went out of her way more than once to help us while fixing up our prior house to sell, pricing it right, then finding another home.

As for purchasing. You'll need $1500-2000 available for inspections and earnest money. Those items and closing costs (which are usually mostly covered by the seller) are the out of pocket costs you'll have to worry about. Good luck and have fun.

 

[jbrentn]

Thanks, gentleman. All input is appreciated.

 

[tyromeo55]

I didnt see where anyone mentioned PMI. You might do a little research on that.

 

[bootsbaker]

first of all congratulations on planning on purchasing a new home. I love that you are actually 'planning' ahead, this will give you plenty of time to save up a down payment which could be anywhere from 3.5% ranging all the way up to 20% or more if you choose. If you pay 20% down on a conventional loan you will not have to worry about PMI.
Interview the builders ask for references and call them. If you purchase a newly built home most builders provide some type of warranty if you purchased a previously owned home then a builder is not going to really be much help to you. First step in purchasing a home is to get your pre approval from a lender, do not be afraid to shop around <-- you only need to take this step when you are ready to start looking at homes. I love working with first time buyers but I am not in your area :-/
Interview realtors, find one that you click with, because hiring a realtor is sort of like having a short intense non romantic dating relationship LOL You want to get along and feel comfortable with that person because you will be giving alot of personal information. You could go ahead and find an agent now and be very upfront with them that you are not ready to purchase yet and you are just looking, they can still provide you with education materials etc. Good Luck! if you have any other questions feel free to pm me.

 

[Sunshine7388]

I'm new around here, but figured I could help a bit here as I am a licensed real estate assistant.

You've gotten some great advice so far. Alot of people don't think about the monthly things such as yard care and utilities. It's nice and refreshing to see people mentioning those things to you. Please don't max yourself out, because while your interest and payment are set, your taxes and homeowners insurance is not and if those go up, so does your monthly house payment.

Since you are about 12 months out, it's a great time to make sure your credit is all in line. If you are wanting to custom build from the ground up, you need to think about the time period it takes to build, sometimes building over the winter takes longer if we get snow and ice. Also someone mentioned that alot of new homes don't come with things like a fence, appliances, etc. This is pretty common, however you can always ask for things like this in your purchase contract.

I would suggest since you have never bought a home before to find a good Realtor that will work for you as a Single Party Broker, without charging you money. Most Realtors don't charge buyers at all, we get commission from the seller. The single party broker is important, that means that they will work for your benefit and will be your advocate. As a buyer, especially a first time one, this is normally a pretty big deal. Referrals are normally the best way to find a great Realtor, ask friends and family who they used when they bought. Word of mouth is the best way to truly know who does a good job and who just looks good on paper/internet. Don't be afraid to interview a few different Realtors. Buying a home can be stressful, so make sure that you are comfortable with your Realtor.

When it comes to your loan, depending on what type of loan you want to get will depend on costs. If you go with an FHA loan then there are several options regarding help with down payment, but you do have to pay Private Mortgage Insurance (PMI). The PMI will be a monthly charge within your house payment until you reach 80% of your original loan amount. Conventional loans require you to bring your own down payment, however you don't have the monthly PMI. If you are current or former military then you also have the option of a VA loan. It all depends on how you are set money wise and what you want to do, this is where a loan officer comes in. They can give you more details on how all the loan stuff works. You call just call your bank and ask to speak to one of their loan officers or ask around, see who others have used, I'm sure they will be more than happy to answer any questions you may have on all the ins and outs of getting a loan and the different programs that are available. You'd be surprised at how many options are out there.

If you don't work with a Real Estate Agent, then be sure to ask your builder things like do they have a mortgage company that they work with on a regular basis, sometimes builders do this and if you use their company you get a discount. Be sure to ask about what kind of warranty they offer buyers. It will differ from each builder on what is covered and what is not. Ask if they are offering buyer concessions, this is usually in the form of helping with your closing costs or giving you credit against the sales price for having to do things like a fence or appliances. If you work with an agent, then make sure you are open and honest with them on what is important to you. Most that have experience will ask you questions about what is important, and know how to work with builders and get the things you want and need.

Be sure you get a home inspection, even on a new home. You'd be surprised at what these home inspectors find with a newly built home. Generally these can run anywhere from $200 to $500 depending on the inspector. With a new home you won't need a termite inspection, but if you buy a previously built home, you will need to get one of these as well, the lender will require it. Termite inspections can run anywhere from $100 to $300 depending on the inspector.

Finally I didn't see anyone comment on closing. You will have closing costs, these are things that are paid at the time the house is finished. You'll go to a title company, who has researched the title/abstract on the house as well as done a mortgage survey, to map out the easements and how your house is sitting on your lot. They will also do things like record your deed & mortgage, and handle the transfer of funds at time of closing. How much you pay in closing varies depending on sales price, your lender, choice in title company, if the seller/builder pays any of your closing, etc. Don't be afraid to ask for help on closing costs, it will save you money up front if the seller/builder is willing to pay some of this expense.

I hope this helps. Good luck!