First Home

EddieWalker · Apr 7, 2014

You don't need a realtor if you already found the house you want and you can agree to the price. Negotiate the fees how you feel is fair. Usually both sides split them 50/50, but if they are selling it to you at below market price, you might want to pick up some of those fees. It's up to you. A survey is nice, but if you know where the pins are, most banks will accept a legal description instead of paying for a survey.

To know if the price is fair, you need to see what houses of similar age, size and location have sold for. The bank that you are going to use for the loan will do this for you before approving your loan. You should hire a home inspector and have him go through the entire house. Just because they are great people doesn't mean they took care of the house or even know what's wrong with it. Termites are sneaky and easy to miss. Water damage, foundation issues and cracks in the walls that nobody noticed or just assumed where natural can all be huge concerns for you down the road. Is the electrical up to code and has anybody done any illegal modifications that might lead to a fire? That's very common, both by home owners, a friend and sloppy contractors.

You can hire an appraiser to find the current value and they will also run the comps for you. Usually they are just a couple hundred bucks.

If you and the seller come to an agreement on the price and you decide to go forward, then go to the title company of your choice and tell them that you are buying the house from them and you want them to do the paperwork. You can also go to a real estate lawyer. I've done both and neither is any better then the other. Usually it's the bank that prefers one over the other because that's who they have worked with the most. Ask your banker who they like to use, it makes things go smoothly.

Never fall in love with a house before you buy it. It should always be treated as an investment that you will one day sell and make a profit on. If not, don't buy it. Simple as that.

Good luck,
Eddie

mjarrels · Apr 7, 2014

Never buy a house with some one you are not married to.

mark

bigtiller · Apr 7, 2014

mjarrels said:
Never buy a house with some one you are not married to.

mark

Excellent advice, along with forget the Realtor, get a real-estate lawyer.

DT86 · Apr 9, 2014

We have determined that this house is more than we feel comfortable paying monthly. It would put us in a real bind until she graduates this fall. The best I can hope for is for it to sit on the market a while and maybe make an offer later on.

Thanks for all the replies, I learned things I can use when the next one comes along.

dmccarty · Apr 9, 2014

It can be a problem getting a comparable for a house in the country. When we got our house refinanced a few years ago, the houses used for comparables were not even close to be a comparable but the appraiser used the best he could find. In a long term, depressed market, knowing the value of a house can be problematic. You can try various websites that list houses or pay an agent a few dollars to print out a list of homes in the area that have recently sold.

Have you told the owners that you cannot afford the house until your girlfriend graduates this fall? They very well might take a contract that says the house will sell after she graduates and say no later than 1/1/2015 or some such.

Good Luck,
Dan

DT86 · Apr 9, 2014

I know what you mean about finding comparable homes.

We plan to meet with them this afternoon and see what happens.

EddieWalker · Apr 9, 2014

A friend of mine offered a seller a deal to lease the house for two years with a contract to buy it after the two year lease was up for an agreed upon price. It covered the sellers mortgage and nobody was buying at that time, so it turned out to be a win win for everyone. There are always options if you really want the place and they really want to sell it.

Eddie

dave1949 · Apr 9, 2014

Yep, where there is a will, there is often a way. Owner financing for several years could be an option to explore too. Lease to own, rent to own, are at least worth talking about. It sure sounds like they would like to see you in that house.

mark02tj · Apr 9, 2014

This may come too late since you say you're meeting with them this afternoon, but.... dave1949, dmccarty and Eddie Walker all have good points about leasing with an option to buy or seller financing. Hopefully you can deal direct with the sellers/neighbors and keep their kids out of the "negotiations". I'm not suggesting that by keeping the kids out of things that you'd take advantage of them, but merely that the children will often look out for their own interests instead of what might be best for their parents or what their parents desire. Hopefully you also know their kids but sometimes even that's not good.

If you do end up with owner financing, be sure that you can refinance with a bank at any time so you can lock in a low, fixed rate when the time is right. Also, be sure that you're not forced to go for financing upon the death of the either or both of the parents - the loan should transfer to the estate. Otherwise one of the kids could try to force you to refinance the loan before you're ready.

I know I sound like I'm down on family members, but that's not really the case. I'm a (now non-practicing) CPA and have seen all sorts of situations where "nothing should go wrong" instead go very wrong. Money does strange things to people when relatives die and if your neighbors die while you're still paying things, one (or more) of the kids will want to get "their share" as quickly as possible which could spell trouble for you. Just like I advised earlier in this thread, pay for a couple of hours of time for a good real estate attorney.

I do wish you and your lady the best of luck with this!! I remember just how excited I was when I bought my first house (in 1988) and I also remember what went wrong after the sale so hopefully I (along with folks on this forum that are a LOT smarter than me!) can help save you some headaches.