Home Sweet Home?
July 22, 2013 1:24 AM Subscribe
I have never gone through the home buying process before, and neither has my charming lady.
She lives and works in SFO, and wants to buy a house here in PDX (moving here immediately after, or close enough).
I (obviously) live in PDX, and can act as an interested party, but not in any legal sense (think long engagement).
We think we have the initial stuff covered, she's going to talk to her credit union about pre-approval and such, and I have several good recommendations for agents and some friends in the realty business.
What we don't know (abbreviated, because that could be a loooong list):
* What is the value of having a real-estate agent (asking them has not proven fruitful so far)?
* Is there a 'best' time of year to buy up here?
* What kind of deals should make us Run. Away. Now.
* Besides getting the credit union involved re: loan pre-approval, is there anything else we need to do? Anything we should do?
* How seriously will anyone take me, acting in her stead? How can I act as her agent (without power of attorney)?
We could probably navigate this on our own, but we are both treading uncharted waters at this point, and a little freaked out. Thank you for calming us down.
I (obviously) live in PDX, and can act as an interested party, but not in any legal sense (think long engagement).
We think we have the initial stuff covered, she's going to talk to her credit union about pre-approval and such, and I have several good recommendations for agents and some friends in the realty business.
What we don't know (abbreviated, because that could be a loooong list):
* What is the value of having a real-estate agent (asking them has not proven fruitful so far)?
* Is there a 'best' time of year to buy up here?
* What kind of deals should make us Run. Away. Now.
* Besides getting the credit union involved re: loan pre-approval, is there anything else we need to do? Anything we should do?
* How seriously will anyone take me, acting in her stead? How can I act as her agent (without power of attorney)?
We could probably navigate this on our own, but we are both treading uncharted waters at this point, and a little freaked out. Thank you for calming us down.
Remember to add the cost of insurance, taxes and utilities to what your monthly payment on the loan will be to get a more accurate idea of your monthly costs.
Also it would be ideal to save some each month for when something breaks.
I'd say take your time and find just the right place. Good luck!
posted by dawkins_7 at 5:04 AM on July 22, 2013
Also it would be ideal to save some each month for when something breaks.
I'd say take your time and find just the right place. Good luck!
posted by dawkins_7 at 5:04 AM on July 22, 2013
Get very familiar with millage rates, assessment values and market values for the neighborhoods you might want to live in. Find out how propety assessments are done, as it will affect how much you pay in taxes. If your county posts property assessments and sales histories online, do some reading. Find out how many times the house has been sold, and for how much. Did the owners keep up on the property taxes? Does the listing price seem to be compatible with the assessed market value of the house? For example, Mr. TheBRKP and I looked at a house recently where the seller was asking $100,000 over the assessed value of the home. It has been for sale for over a year and a buyer who pays that much over the assessment can run the risk of a larger tax bill.
posted by theBigRedKittyPurrs at 5:35 AM on July 22, 2013
posted by theBigRedKittyPurrs at 5:35 AM on July 22, 2013
Best answer: Buying a house isn't necessarily a foregone conclusion. The face of homeownership has changed quite a bit since the crash and there's a new reality.
1. Only buy a home if you intend to live in it for at least 10 years, and probably forever.
2. Buy the house you can realistically afford, in the place you like the most.
3. Buy the house you'll need for the rest of your life.
4. Have a 6 month emergency fund, 20% downpayment, closing costs, and about $10,000 for "shit gonna break" because shit gonna break.
Here is the process. You will work with a real estate agent. You'll scout for possible houses on Realtor.com and other MLS sites. You'll go through the houses, some more than once. When you find one, you'll make an offer on it, and you'll negotiate with the seller on a price. If accepted, you'll pony up some "earnest money" a couple grand. This is technically a non-refundable deposit. It shows that you are earnest about contracting on the house. You will now have a "Due Dilligence" period, for inspections and to firm up financing. After that, you are under contract and are obligated to purchase the house as agreed.
You'll get with your mortgage broker (always get more than one quote on your mortgage, it will save you $$$$) and lock in your interest rate, you'll get a Good Faith Estimate on the amount of money you'll need to bring to your closing. You'll need to have a Cashier's Check for the exact amount on the day of closing.
In the interim, you'll hire an inspector to look over the house. This person will let you know if there are issues with anything and if there are going to be issues in the future. The systems will be inspected, the roof, the foundation, etc. If the inspector finds anything wrong, you have a few options, you can have the seller fix any issues, you can ask for some money off the price or you can walk away from the deal if it's really terrible.
The morning of your closing you'll do a walk through. This is to insure that you're getting the house exactly as it was promised to you. If there's hanky-panky (all of the appliances are gone) then don't close. If there were promised repairs, you'll want the inspector to affirm that they are done, and done correctly (you'll pay for this).
One thing you can negotiate for is a 12-month warrany, the seller will pay for this. This means if an appliance breaks, you can call them and they'll send someone out to fix it.
You can throw all kinds of crazy stuff in your offer, the window coverings, the furniture, etc. So if you see a chandelier you love, or a pretty table, ask for it, the worst they can do is say no.
Finally, you'll have an appraisal, this is done by the bank (and lucky you, you'll pay for it) they're doing this to insure that the house is worth what their portion of the loan is.
I have owned my house for 7 years, and it's been nothing but a money pit. I've owned 4 houses, and I thought I knew what I was doing, but this one has confounded me.
We sold it last week, and it's being inspected RIGHT NOW! I'm holding my breath because I can't wait to get back into a rental, because I love it when I can call a guy when something breaks, instead of having to write a check.
Also, once you own a home, maintenance is all on you:
1. Lawn mowing
2. Garden
3. Gutter Cleaning (three times a year!)
4. Tree Pruning
5. Tree removal (if they die, or are sending roots into the water pipes, or are dangerous.)
6. Staining and re-sealing the deck
7. Servicing the HVAC twice a year.
You will not have a totally free weekend again! The guys at Home Depot will know you by name! You'll own tools you never knew existed!
But seriously, go to a Home Ownership class. Here's a resource in Portland. Go, learn and THEN decide how to go about this, or even IF you want to go about this.
Do NOT rush into this. Have your girlfriend get a place for a few months, get settled, take the classes, secure financing and THEN, if after you've done your research you still want to buy, go for it.
posted by Ruthless Bunny at 6:11 AM on July 22, 2013 [4 favorites]
1. Only buy a home if you intend to live in it for at least 10 years, and probably forever.
2. Buy the house you can realistically afford, in the place you like the most.
3. Buy the house you'll need for the rest of your life.
4. Have a 6 month emergency fund, 20% downpayment, closing costs, and about $10,000 for "shit gonna break" because shit gonna break.
Here is the process. You will work with a real estate agent. You'll scout for possible houses on Realtor.com and other MLS sites. You'll go through the houses, some more than once. When you find one, you'll make an offer on it, and you'll negotiate with the seller on a price. If accepted, you'll pony up some "earnest money" a couple grand. This is technically a non-refundable deposit. It shows that you are earnest about contracting on the house. You will now have a "Due Dilligence" period, for inspections and to firm up financing. After that, you are under contract and are obligated to purchase the house as agreed.
You'll get with your mortgage broker (always get more than one quote on your mortgage, it will save you $$$$) and lock in your interest rate, you'll get a Good Faith Estimate on the amount of money you'll need to bring to your closing. You'll need to have a Cashier's Check for the exact amount on the day of closing.
In the interim, you'll hire an inspector to look over the house. This person will let you know if there are issues with anything and if there are going to be issues in the future. The systems will be inspected, the roof, the foundation, etc. If the inspector finds anything wrong, you have a few options, you can have the seller fix any issues, you can ask for some money off the price or you can walk away from the deal if it's really terrible.
The morning of your closing you'll do a walk through. This is to insure that you're getting the house exactly as it was promised to you. If there's hanky-panky (all of the appliances are gone) then don't close. If there were promised repairs, you'll want the inspector to affirm that they are done, and done correctly (you'll pay for this).
One thing you can negotiate for is a 12-month warrany, the seller will pay for this. This means if an appliance breaks, you can call them and they'll send someone out to fix it.
You can throw all kinds of crazy stuff in your offer, the window coverings, the furniture, etc. So if you see a chandelier you love, or a pretty table, ask for it, the worst they can do is say no.
Finally, you'll have an appraisal, this is done by the bank (and lucky you, you'll pay for it) they're doing this to insure that the house is worth what their portion of the loan is.
I have owned my house for 7 years, and it's been nothing but a money pit. I've owned 4 houses, and I thought I knew what I was doing, but this one has confounded me.
We sold it last week, and it's being inspected RIGHT NOW! I'm holding my breath because I can't wait to get back into a rental, because I love it when I can call a guy when something breaks, instead of having to write a check.
Also, once you own a home, maintenance is all on you:
1. Lawn mowing
2. Garden
3. Gutter Cleaning (three times a year!)
4. Tree Pruning
5. Tree removal (if they die, or are sending roots into the water pipes, or are dangerous.)
6. Staining and re-sealing the deck
7. Servicing the HVAC twice a year.
You will not have a totally free weekend again! The guys at Home Depot will know you by name! You'll own tools you never knew existed!
But seriously, go to a Home Ownership class. Here's a resource in Portland. Go, learn and THEN decide how to go about this, or even IF you want to go about this.
Do NOT rush into this. Have your girlfriend get a place for a few months, get settled, take the classes, secure financing and THEN, if after you've done your research you still want to buy, go for it.
posted by Ruthless Bunny at 6:11 AM on July 22, 2013 [4 favorites]
I just bought a house. One thing to clarify from RB's comment.
This is technically a non-refundable deposit. Um, no. If you find something you don't like during due diligence and decide not to buy the house after all, you get that money back. If you do decide to buy the house, it gets applied to the cost of the house and/or closing costs.
You shouldn't try to act in her stead. If you aren't buying the house together, then she should be the one looking at houses and making decisions. It isn't clear from your question whether you will be living in the house with her, but if you aren't buying the house, SHE should be the one making decisions about it. If the timing or whatever makes it impossible for her to do that, then it isn't the right time for her to buy a house.
We used a buyer's agent. She was helpful, but not spectacularly so. It was easier to just send her the list of places we wanted to go and let her set up showings than trying to contact each seller's agent and try to arrange things.
We spent a lot of time on Trulia as a place to look at homes for sale. We found it easier to navigate that the thing the realtor gives you access to. We also went to a lot of open houses, even for places that weren't exactly in our price range to get a sense of what was available at different price points and in different areas. She should also be thoughtful about how much fixing up she wants to do. I wanted to do -zero- significant work, so we bought a newer place in great shape.
Buying a home someplace you don't live is really challenging. It would probably be better to move there, get a job, get settled, learn the area - and THEN buy a house. You may think you can select a house for her, but if you live apart she may have wants and needs you're just not aware of in a house.
posted by jeoc at 6:46 AM on July 22, 2013 [2 favorites]
This is technically a non-refundable deposit. Um, no. If you find something you don't like during due diligence and decide not to buy the house after all, you get that money back. If you do decide to buy the house, it gets applied to the cost of the house and/or closing costs.
You shouldn't try to act in her stead. If you aren't buying the house together, then she should be the one looking at houses and making decisions. It isn't clear from your question whether you will be living in the house with her, but if you aren't buying the house, SHE should be the one making decisions about it. If the timing or whatever makes it impossible for her to do that, then it isn't the right time for her to buy a house.
We used a buyer's agent. She was helpful, but not spectacularly so. It was easier to just send her the list of places we wanted to go and let her set up showings than trying to contact each seller's agent and try to arrange things.
We spent a lot of time on Trulia as a place to look at homes for sale. We found it easier to navigate that the thing the realtor gives you access to. We also went to a lot of open houses, even for places that weren't exactly in our price range to get a sense of what was available at different price points and in different areas. She should also be thoughtful about how much fixing up she wants to do. I wanted to do -zero- significant work, so we bought a newer place in great shape.
Buying a home someplace you don't live is really challenging. It would probably be better to move there, get a job, get settled, learn the area - and THEN buy a house. You may think you can select a house for her, but if you live apart she may have wants and needs you're just not aware of in a house.
posted by jeoc at 6:46 AM on July 22, 2013 [2 favorites]
* What kind of deals should make us Run. Away. Now.
Anything that seems too good to be true, and getting a feel for that will require looking at a lot of houses. When I was looking last year, I saw a number of houses that seemed like great deals until you found out about the sun-blocking condo building going in across the street or the pending redevelopment of neighboring golf course or the massive HOA special assessments due to all the foreclosures or the floods every month. In most cases, no one has a responsibility to tell you these things, so it's up to you to figure it out.
Put it another way: by the time a house is listed, a number of insiders who know more than you ever will about the local market have had a chance to purchase it. It's up to you to figure out why they all passed on it.
* How seriously will anyone take me, acting in her stead? How can I act as her agent (without power of attorney)?
Very seriously and then not seriously at all. You can look at all the houses you want and wave around her pre-approval if necessary. In my area, it's pretty common for someone to be house-hunting for an out-of-town friend, and agents are not surprised if you show up and take lots of pictures/video. Once she's under contract, though, there's not much you'll be able to do aside from things like being there for the house inspection and perhaps couriering some paperwork (though, at least where I live, it's almost entirely online these days).
posted by backupjesus at 6:49 AM on July 22, 2013
Anything that seems too good to be true, and getting a feel for that will require looking at a lot of houses. When I was looking last year, I saw a number of houses that seemed like great deals until you found out about the sun-blocking condo building going in across the street or the pending redevelopment of neighboring golf course or the massive HOA special assessments due to all the foreclosures or the floods every month. In most cases, no one has a responsibility to tell you these things, so it's up to you to figure it out.
Put it another way: by the time a house is listed, a number of insiders who know more than you ever will about the local market have had a chance to purchase it. It's up to you to figure out why they all passed on it.
* How seriously will anyone take me, acting in her stead? How can I act as her agent (without power of attorney)?
Very seriously and then not seriously at all. You can look at all the houses you want and wave around her pre-approval if necessary. In my area, it's pretty common for someone to be house-hunting for an out-of-town friend, and agents are not surprised if you show up and take lots of pictures/video. Once she's under contract, though, there's not much you'll be able to do aside from things like being there for the house inspection and perhaps couriering some paperwork (though, at least where I live, it's almost entirely online these days).
posted by backupjesus at 6:49 AM on July 22, 2013
My boyfriend is trying to purchase a house for us in Portland right now (we both live here). Inventory is very tight in Portland. If she wants to even see the home before you make an offer, she will need to see it the first time you visit it--homes are turning over quickly.
A good real estate agent will show you homes quickly, advise you about details of the home that you wouldn't necessarily pay attention to, set up necessary home inspections, feel out the seller/seller's agent for you, help you come up with a number for your offer and any other concessions you should make or ask for, and help you get into the house in a competitive bidding situation.
posted by Packy_1962 at 8:35 AM on July 22, 2013
A good real estate agent will show you homes quickly, advise you about details of the home that you wouldn't necessarily pay attention to, set up necessary home inspections, feel out the seller/seller's agent for you, help you come up with a number for your offer and any other concessions you should make or ask for, and help you get into the house in a competitive bidding situation.
posted by Packy_1962 at 8:35 AM on July 22, 2013
I've recommended the Nolo Guide for first-time home buyers and recommend it again here. This can't help with the specifics of your situation (i.e. offsite buyer, the Portland market), but has really, really useful general advice.
posted by Betelgeuse at 9:03 AM on July 22, 2013
posted by Betelgeuse at 9:03 AM on July 22, 2013
We just bought in New England. Get a buyer's agent. Pound money into your savings. Pre-approval is great but you've got to be able to write the big checks.
Our buyer's agent prided himself on getting people in the right house, talking them out of things that are too big, too busted up, or in shitty areas. Sure they want to make money, but unlike a seller's agent, they want you, the buyer, to get the lowest possible price and the most bang for your buck.
posted by vrakatar at 9:11 AM on July 22, 2013
Our buyer's agent prided himself on getting people in the right house, talking them out of things that are too big, too busted up, or in shitty areas. Sure they want to make money, but unlike a seller's agent, they want you, the buyer, to get the lowest possible price and the most bang for your buck.
posted by vrakatar at 9:11 AM on July 22, 2013
"I just bought a house. One thing to clarify from RB's comment.
This is technically a non-refundable deposit. Um, no. If you find something you don't like during due diligence and decide not to buy the house after all, you get that money back. If you do decide to buy the house, it gets applied to the cost of the house and/or closing costs."
Are you a real estate agent, jeoc? I sure hope not!!
drfu, please ignore this terribly inaccurate information. If you don't currently understand how earnest money works, talk a real estate lawyer or a licensed real estate agent.
posted by peep at 9:46 AM on July 22, 2013
This is technically a non-refundable deposit. Um, no. If you find something you don't like during due diligence and decide not to buy the house after all, you get that money back. If you do decide to buy the house, it gets applied to the cost of the house and/or closing costs."
Are you a real estate agent, jeoc? I sure hope not!!
drfu, please ignore this terribly inaccurate information. If you don't currently understand how earnest money works, talk a real estate lawyer or a licensed real estate agent.
posted by peep at 9:46 AM on July 22, 2013
Has she lived in Portland before? I would be wary of buying a place and being locked into a location before I'd really gotten to know the town. My brother and his wife bought a place in New England in the winter when everything was covered in snow and looked pretty. When it melted and they really saw the neighborhood? They wanted out as soon as possible.
Echoing backup jesus' comment. Look hard at the neighborhood for potential future development. Are there vacant lots? What I've seen in Pdx is multifamily housing going in on tiny lots which means they are building vertically and changing existing views. (Which also means construction noise for several months.) Likewise, are there older buildings liable to be torn down? Any signs around indicate lots for sale for multiple zoning use? That could mean commercial buildings where there were residential.
posted by Beti at 10:47 AM on July 22, 2013 [1 favorite]
Echoing backup jesus' comment. Look hard at the neighborhood for potential future development. Are there vacant lots? What I've seen in Pdx is multifamily housing going in on tiny lots which means they are building vertically and changing existing views. (Which also means construction noise for several months.) Likewise, are there older buildings liable to be torn down? Any signs around indicate lots for sale for multiple zoning use? That could mean commercial buildings where there were residential.
posted by Beti at 10:47 AM on July 22, 2013 [1 favorite]
What is your lady's income/employment situation? Her lender is going to want to know that her income is going to continue at the same level when she relocates -- will she be telecommuting? Is she self-employed? And if so will she have the same market in PDX? Buying a house in a different city from her employment is definitely going to be an issue. I'd talk to the credit union about that well before I worried about finding a realtor.
posted by tinymojo at 12:26 AM on July 23, 2013
posted by tinymojo at 12:26 AM on July 23, 2013
Response by poster: Thanks all!
This is all good fodder for us to chew on, and is already helping us figure out the plan of attack.
To answer a few of the questions (in no particular order):
* We are planning on living together in a year or two. Current circumstances on my end are preventing that at this time.
* We have talked about what we want in a house, but I think it would be good for us to write things down so neither of us are guessing about desires of the other.
* I have lived here for 35 years, and know the lay of the land re: weather, neighborhoods, &c.
* She believes that she can continue in her current position as a remote employee, so there should be no trouble on that front.
posted by drfu at 11:15 AM on July 23, 2013
This is all good fodder for us to chew on, and is already helping us figure out the plan of attack.
To answer a few of the questions (in no particular order):
* We are planning on living together in a year or two. Current circumstances on my end are preventing that at this time.
* We have talked about what we want in a house, but I think it would be good for us to write things down so neither of us are guessing about desires of the other.
* I have lived here for 35 years, and know the lay of the land re: weather, neighborhoods, &c.
* She believes that she can continue in her current position as a remote employee, so there should be no trouble on that front.
posted by drfu at 11:15 AM on July 23, 2013
This thread is closed to new comments.
* What kind of deals should make us Run. Away. Now.
Don't buy in a neighborhood where you don't actually want to live.
Don't buy a house so far from your workplace that the commute will be miserable.
Don't buy a house that's overpriced.
Don't buy a house that you can't afford to maintain.
Don't buy any house unless you expect to be there for something like 7 years or more, because buying and selling houses is really expensive and if you aren't going to be there long enough for the house's value to increase enough to cover those transaction costs then you're better off renting.
posted by jon1270 at 3:43 AM on July 22, 2013