So yeah, the Wife and I are considering buying a house. Just considering it, mind you. We don't have the new-house fever and we have a healthy fear of the (apparently) horrid number of hoops that must be jumped through. We've never owned a house before, only rented.

Will it be awful? Will it be like a brand new day? Will we both gain twenty pounds and never leave the house again?

Any input will be appreciated.

Harold wonderland 2 http://jennyseat.freeservers.com/wonder/

-- Anonymous, April 19, 2000

Answers

It's both better, worse, and less interesting than you imagine. I love owning a house, but Jeremy is still a little dismayed about the whole thing. I think the tax break this year did a lot to convince him that buying a house was a good thing to do.

I can't think of any particular advice right now, except this: you know how most people feel about lawyers and car salesmen? You should add real estate agents to that list. If you think your realtor is your friend, you aren't being sufficiently cynical, and you should step back for a minute before you get screwed.

I know so many people who love their realtors and consider them friends, and then you find out about their escrow terms, or how much they paid for their house ... yikes. Your realtor has an inherent conflict of interest because she makes more money the higher your final price is. Period. Don't ever forget that.

-- Anonymous, April 20, 2000

We bought last year, and I love it too, except for the times when something breaks down and you can't just call the landlord. Also, it's really to get sucked into a big 'must buy a house' trap and spend more than you planned to.

-- Anonymous, April 20, 2000

Hell, it was the best thing I ever did. After sitting and watching and waiting and house prices NEVER going down I jumped in and bought.

Yes, real estate agents are demon spawn on Earth (and where's Buffy when you need her?) but buying a house was definately the right thing for me.

You have to want it though. It suddenly takes over everything - you'll decorate, you'll want nice furniture. Something will go wrong and cost money. But if you are ok with that bit and not going out all the time definately go for it.

I don't think buying my house has changed me significantly - I'm not any more mature or boring or fatter. Good luck Just Stopping By
Caoimhe

-- Anonymous, April 20, 2000

Yeah, I bought about two years ago, and I'm fairly happy that I did (in fact, I would've bought the house that Beth bought if the price hadn't been alot higher when I was looking). The tax break is the big advantage. I can't say that I have that "pride of ownership" thing going, but I do feel achored; more connected to the place I live, which is something I needed at the time. Plus, if you ever felt the need to flex your "handy man" skills, nothing is better than owning.

I recommend checking out the "buying a house" book from Nolo Press, they have some really good advice, including "why you shouldn't buy a house". They say that real estate isn't the best investment you can make, but for most people, it's the only big investment they ever make.

My house came with a basement rental unit which has definatly eased the pain of making those house payments. It also makes my house a good income property if I ever choose to move.

Buying definatly involves jumping through a lot of hoops, it can be frustrating, annoying, and stupid, but it's worth it. The best thing you can do is plan for it well in advance, save down payment money, closing costs, origination fees, escrow fees, etc etc. Or you can do it the way I did, forget about the planning, open your checkbook, and phone your relatives!

Best of Luck!

-- Anonymous, April 20, 2000

A big YES YES YES from me - it's the best decision we made since eloping. I was terrified, and for at least 2 years Charlie kept saying we should buy a house, I kept insisting that I didn't want to. I think it was just fear of getting turned down, biting off more than we could chew, choosing a spot in a neighborhood we would end up hating later, getting shitty neighbors, getting a shitty interest rate and ending up with a shitty payment, etc. Finally, I gave up, because I knew he was right, and I was tired of throwing away money on rent.

Once we started to look (just to get an idea of what was out there) we suddenly fell victim to house fever. I mean, we were nowhere near ready, still had 6 months on our lease, had virtually no money saved up for a down payment, and all of a sudden we could think of nothing but getting into a house FAST. We ended up putting a contract on a house we saw the second and final day we "browsed".

Yes, it was scary. We both vomited the day of the closing. The interest rates hiked almost daily, and our lock-in was about to expire, so we had to close before we could do a proper walk-through. We bought a brand new house still under construction, and the list of gigantic nightmares that came along with that process is endless ( for example: we moved in 4th of July weekend in Georgia to no air conditioner - never attached to the house. No power in half of the downstairs - bad wiring. No natural gas service - a pipeline was never layed for our property, and when it finally was 8 days later, we had a leak because pipes in the attic had never been attached. Upstairs garden tub leaked entire contents to air vent which dumped water into kitchen, because pipes were never connected. We had freezing showers and scalding rooms, no oven or stove, no lights in the living room, and no grass in the yard front or back, just mud, because it wasn't finished in time. We got no mail for 2 weeks because the carrier thought our house was still under construction. The builder waited until the day of the closing to have the flooring installed, the final painting done, and the appliances installed. The refrigerator was missing the hose for the ice maker. The sink's hot and cold faucets were (and still are) backwards. The bathroom door was installed backward, and hit the toilet when you opened it. There was also no lock on the bathroom door. The hardwood floor in the foyer has come completely unglued and must be relayed, but we have been trying for 9 months to get this done and are still waiting.) You might be wondering why, after all these problems, I would wholeheartedly recommend buying a house? Because the sheer joy of home ownership made all the problems seem not so bad. Once we got the major things taken care of, we realized how truly fantastic having our own house was. And it just so happened that we got lucky and ended up in The Perfect House for Us.

We are broke all the time now because every last dime goes into landscaping/gardening, or painting the rooms, or adding things, or upgrading, and we LIKE that. A new house is a blank canvas on which we have been able to paint our dreams, corny, but true. Every little touch we add makes us proud. We love our street. We love our neighbors, even the ass-wipes. And most importantly, we love our house. The privacy. The yard. The massive amounts of space. No longer are we under each other's feet. Having guests over is a pleasure and we no longer have to apologize that the litter box is in the guest room, and the computer is in the dining room, because everything has it's own place now! Our pets love the house. Our cars love the garage. We love that there's room for a pool if we ever decide to put one in. We love watching the wildlife eat the food we put out for them. We love looking at the front of the house as we drive down the street. We love being the first people in the cul-de-sac to paint our mailbox post white. WE LOVE OUR HOUSE!!

All I can say is, don't be shy to make a ridiculously low offer - you can always go up but you can't go down. We paid way too much for our house because we were wimpy and didn't have anyone fighting for us - we used the Real Estate Agent that came with the house - BIG MISTAKE!

Also, HIRE YOUR OWN INSPECTOR!! It will be the best $100 you ever spend. Also, something that we learned the hard way, because the inspector the builder used evidently never came to our house at all, ever. I'm pretty sure he just picked up his check from the builder and signed off on the property, because no way he would have approved a house with none of the pipes, wires, appliances or landscaping installed properly if at all. And it was, of course, illegal for us to close on a house that had no grass (don't ask me why) but we managed to do it anyway because if we lost the lock-in our payment was going to jump another $100 a month.

It's not easy to go through the process when you have no idea what the process is. And signing 843 pieces of paper is quite unsettling for the tummy (bring Pepto or Pepsid AC to the closing...trust me), but it's all SO worth it. Every bit of it. Or at least it's worth it to us.

Good luck!

Sorry this was so long Beth. It goes back to that whole "What's your obsession" thing.

Whatever you do, don't trust anyone who stands to make money from your purchase to look out for your best interests. Raise hell if you want something done before you buy. Make sure it's in writing on the contract if it's to be done after the closing. Cover your ass heavily, and you will be a very happy homeowner when you decide the time is right.

-- Anonymous, April 20, 2000

Pros - Tax benefit. It's an investment. Your own place where you can do what you want. Maybe things like having a yard or moving to a different area.

Cons - You have to fix everything or hire somebody to fix it. It's a lot of money. It's a big committment - to your spouse, financially, etc. Lack of mobility.

It's not for everyone. I know a lot of people who've looked at all sides and decided it doesn't make sense for them.

-- Anonymous, April 20, 2000

Everyone is talking about repairs. We've had our share of problems with the house, but we've not had to pay much out of pocket.

We got a Home Owner's Warranty when we bought the place. We paid a bit over $200 for it. I'm so glad we got it. After moving in, the pool filter had to have new screens, and one of the pumps was broken. If we would have paid out of pocket it would have been over $400.

We had to play $40 each time they did something, but it's a lot better than the alternative. Aside from the two things with the pool -- We've had a plumber out for a continuously running toilet, an electrician for a disconnected outlet and two that didn't work(two separate occasions), and pest control for the ants.

I can't recommend this ENOUGH. If it's an option, DO IT! We even paid another $300 for a second year of coverage. So far, there have only been two things they wouldn't fix. One of those is the zero property line fence, and the other is the automatic atennae that's on top of the roof. (Motor is broken?)

The only downside to owning a house for us was the long commute to work and the fact we have to keep up the yard. Since we moved from a second story, one bedroom apartment with 3 people and an 80lb dog (at the time), we didn't have much to lose!

Angie
http://www.falling.com/xanadu/cgi-bin/cal.cgi

-- Anonymous, April 20, 2000

What an asshole I am, talking on my own topic...

Anyway - commuting is not such a big issue. The Wife and I live Downtown - she works here while I work in the suburbs. Anything we buy will be somewhere in Midtown, somewhere between the two. Houses and condos are wicked expensive Downtown, though we've considered (and are still considering) a condo. Downtown in Memphis is really starting to percolate, so we could always move one of those later on...

Somebody said something about "throwing money away on rent." I've never agreed with that. If you go out of town and get a hotel room you don't say, "I threw money away on a hotel room." You get a place to < I>live for your rent money. If I had to write a check for $500 a month and give it to a crackhead, now, that's throwing money away!

So don't trust anybody and aggressively advocate for yourself. Check. Anything specific I should look for in a house? And does anyone have an opinion on condos?

Keep it up, guys - you're totally illuminating me.

-- Anonymous, April 20, 2000

My best advice regarding whether or not to purchase a house or condo is to *really* make sure you know what you're getting yourself into. I cannot stress that enough. Get out your calculator and figure out how much you can afford to spend. With that in mind, drive around the different neighborhoods, and if you see something for sale, have a look. Shop around and find out what features are important to you in a house or condo. Ask a lot of questions too, and do not be timid about it. Find out what the current owner pays for water, electricity, gas, property tax, etc. What schools are nearby. When was the house painted? When was the heater/air conditioner installed? What about the neighbors? If you see any neighbors, introduce yourself and ask them about the neighborhood. Ask if there's been any crime on the street. Ask them anything and everything. If the seller or real estate agent seems unhelpful or bothered with your questions, then it's time to look elsewhere. Did I ask questions? You bet I did, and for the most part, the previous owners were truthful in their answers. The other piece of advice I can give you is when it comes to inspection time. I believe someone else mentioned hiring your own inspector. Do it, and inspect the property right along with the inspector. Even if you don't know what you're inspecting, inspect it and ask questions about it.

The upshot - do not feel bullied, pressured or shy in any way. Make those real estate agents work for your hard earned money.

-- Anonymous, April 20, 2000

I was just thinking, Harold -- you seem to be concerened about some of the same issues that concerned (and still concern) Jeremy: i.e., will owning a house suddenly turn us into bona fide grownups?

Maybe. I don't really think so, though. When we first bought the house, my attitude was something along the lines of, "Hey, cool! No parents! We've got the house to ourselves, dude!" It really felt like that. I started eating Cocoa Pebbles for breakfast and watching cartoons. See, in my reality, kids live in houses; grown ups live in apartments. So having a backyard and a porch and no neighbors on the other side of the wall made me feel like Mom and Dad were just out of town for the weekend.

And then the sewer broke, and I kind of got over that.

So, yeah. Definitely get a plumbing inspection if you buy an old house in an area with a lot of trees. Seriously. Most of our friends who bought in midtown Sacramento when we did had similar problems to the ones we had. It's the one thing I would absolutely do differently next time. No one ever has a plumbing inspection; the home inspector just gives you his opinion, but I would insist on it next time.

-- Anonymous, April 21, 2000

In September I bought a beautiful 3-bdrm colonial in Framingham, MA. Thanks to my unexpected move to NYC, I am now selling same. Loved the house, loved not sharing a wall with anyone, love selling it. I can't imagine how it makes financial sense to buy an older house.

Our mortgage and monthly tax payment was slightly less than we would have paid to rent a comparable house. We paid about $13,000 in downpayment and closing fees, then sank about $13,000 into absolutely necessary repairs (furnace and chimney, asbestos abatement, new wiring and fixtures throughout, stove). Considering that I can only write off about $350 of my monthly expense ($4,200 annually), and that my mortgage balance wouldn't shrink much for five years, I have to believe that I would have lost money over the first five years, even if I wasn't looking at needing a new roof and shoring up the sagging front porch.

I could have taken that $26,000 sunk cost and made more money in investments over the course of five years than I was ever going to save in taxes, especially when you consider that I would still HAVE that $26,000, which is more than five times the annual tax break I got for the house. (I have to admit here that the value of the house rose enough in the last six months that I will actually get to take most of my $26,000 back out of it -- but it's still a net loss on investment, even before you account for the two hundred hours or so I spent making repairs).

My new rental house has all sorts of defects and I don't care because I don't own it. I feel a certain freedom, having shucked the house.

-- Anonymous, April 21, 2000

I totally agree with Tom, by the way. I don't think you should buy a house as an investment; you'd be better off saving that extra money you'd put into mortgage and repairs and putting it into the stock market. Some people make money on real estate, but most people don't make enough to justify their expenses.

Buy a house because you want to live in it, because you want freedom from landlords and co-tenants, because you like home improvement or gardening or pounding large nails into the ceiling, because you want some roots and security. Oh, and the tax write off is nice, too. But money is not the reason to buy a house. Even with the $300 a month it's saving me on my taxes (which I find just mind boggling), we're still losing $400 a month that could be going into a retirement fund if we'd stayed in our old apartment(and that's just mortgage -- we're not talking about repairs, or all the other factors that are more expensive when you own, like garbage and water and sewer costs every month, and higher electric and gas bills). There's just no way we're going to get all of the money back.

We knew that going in, but it still makes Jeremy (Mr. "Don't buy that frozen pizza; we can put that eight bucks into our retirement fund!") cringe a little.

Of course, the rent on our old place has gone up almost $300 a month since we moved out, and it will surely continue to go up while our mortgage payment will remain the same. And the stock market can crash; the real estate market is very unlikely to be that unstable over the long haul, as long as you don't buy at the top of a ridiculous market like the one in San Francisco right now.

-- Anonymous, April 21, 2000

I've also never understood the "you're throwing away money on rent" argument. I mean, you have to pay to live somewhere, right? You eventually build up some equity on a house and then you can borrow against it if you want, and you may sell it for more than you paid, but it's not a sure thing.

Our house has appreciated like $100,000 since we got it. But so have all the other houses around here. If we sold it, where would we go? If we were ready to retire and move to East Bumfuck it would be great, but I don't think we'll want to move to someplace far away even when we are ready to retire.

In the Bay Area, condos can be hard to sell, I'm told. Also, you have to pay a fee to an owner's association and they can make rules that may or may not be to your liking. again, get all the facts.

-- Anonymous, April 21, 2000

Bay Area condo owner (okay, Santa Cruz more specifically, but who's counting?)here...I got lucky when I bought. The housing market here is a nightmare and my place wasn't listed yet. I pounced. It's appreciated $75,000 in 18 months, and I haven't done anything to it. Granted, the value is tied to the desirability of homes in this area, but still....

Plusses: MY SPACE. No one can tell me I can't have animals or that I need to put down a security deposit equivalent to a month's pay. The tax benefit was fantastic this year. I can paint and remodel and change "permanent" stuff to my heart's content w/ no landlord to deal with.

Minuses: The four 20 year olds who live next door. Fucking band practice on a Sunday morning (with thin walls). Limited parking. The association fees (tho they do maintain all of the grounds, insurances, etc.). Not being able to paint the door purple because the Association bylaws dictate otherwise.

The trade-off is worth it for me. Your mileage may vary. To echo what everyone else has said, look at a lot of different homes and demand that your realtor earn their keep. Know what you can afford, what you can tolerate (babyshit green shag carpet can be torn up; the four surfers who party non-stop next door are another story), and when you should say "no way in hell".

-- Anonymous, April 21, 2000

Harold, beware of polybutylene plumbing!! You most likely won't run into it in the midtown or downtown areas, but if you happen to find a deal you can't refuse out east, check out the plumbing. There was a class action lawsuit about this stuff, and the home can be re-plumbed free of charge if and only if you have a major disaster in the home within 10 years of its installation. 6 months of my life last year was tied up over my own disaster. Just do a quick search on the net to find out more info on the subject. Also, at least in TN, your closing agent does not have to be a lawyer. Hiring a lawyer only means you will pay more in closing costs. Regardless of what you real estate agent says, you do have the right to chose who does the closing. Me wife was a closing agent up until the baby was born. Needless to say, the closing on our own home was very...affordable. She has never met a real estate agent she liked, and can give you the scoop on anyone in town, just shoot an email. t

-- Anonymous, April 22, 2000

Hey Harold, As folks have mentioned, I recommend making a list of things that you and the wife want in a house. Besides the mortgage amount you pre-qualify for, the list helps filter the pool down to a reasonable amount of places to look at. Your list should definatly have a "Must Haves" column, a "Nice to Have", "Whatever", and "No Way!" column. For me, the must haves were location (You can change the house but you can't change the location), house style (Bungalow) and air conditioning. The "No Way" was No apartment buildings adjacent to the lot. Parking was in the "Nice to Have" category.

Another thing I would recommend is ask a realator if there are any free home buyer seminars in your area. I ended up taking a series of these classes to qualify for a 100% finance loan. Sometimes the classes will also get you a break on fees or interest rates. Anyways, the classes had all kinds of useful info on special loan programs you may qualify for (I found out I'm in a special census tract that opens up the field on federal loan programs), there was info on home inspections, financing, repairs, etc. Definatly worth while. Most people in the class were there as a condition of a loan program, and were already in escrow - I would recommend taking the classes while you're still think about buying.

If you are considering a condo, I would consider trying to meet the other owners. I've heard that some of those condo associations can be scary! Condos will always have some kind of rules and association fees. If you're considering an older house, be sure to get a home inspector that specializes in old homes.

Also, ask a lot of questions. Sometimes it's easy in the heat of the moment to let certain questions slide, like the one I let slide, "Do you hear that sound? That gushing water sound?"

Oh yeah, and mortgage calculators are your friend. The old formula for the total cost is P.I.T.I -priciple, interest, taxes, insurance. That insurance will probably include mortgage insurance unless you can put down 20% and flood insurance if you live within a 100 year flood plain. Water, sewer and garbage is another one that renters don't usually deal with.

Fun stuff!

-- Anonymous, April 23, 2000

OK, I'd like to revive this thread because I just signed a contract on my first house this weekend. The whole process went really fast. I found the house through an Open House on Sunday, made an offer on Friday, seller countered that afternoon, I countered Saturday morning, she countered again a half hour later, and then we were done. I signed the papers an hour later.

I am having the home inspected on Wednesday morning, if all goes well, I close on August 18th, the day after my birthday. That's some birthday present, huh?

I am buying an old house (1920) in an Atlanta neighborhood that is going through gentrification. People are buying houses to renovate left and right and there is new construction all over the place. My house has just been completely renovated including roof and all systems. Hopefully, the inspection will show the quality of the work.

Anything I should look out for as I get closer to closing date... any tips about the actual closing process?

I have a mortgage broker, but I am shopping for better rates. I just went through lendingtree.com and am waiting to hear from them. Has anyone else used this site to find a mortgage?

-- Anonymous, July 10, 2000

As a condo owner I can speak to some of the plusses and minus to condo life.

resale value: It it true that in general condos can be harder to sell than stand alone homes. I also believe that it depends on what style condo. An apartment style condo is harder to sell than a townhouse condo. But all of these are generalities. We actually have people coming through our development asking when someone will move out, and townhouses tend to be on the market less than a day in my area. Your milage may vary.

condo associations/home owners associations: Make sure you get a copy of the condo by-laws and make sure you can live with them. You may not be allowed to replace your windows, paint anything outside, do any sort of gardening, even in containers or decorate for the holidays. You will also want to find out over the past 5-10 years, how many times have the fees gone up and by how much. You need to know how much is in the reserve fund. If it is low, then if it is discovered that building A needs a new roof, every unit could be assessed for $1,000 and you can't not pay. You should also ask other association members what their experience has been (I would go door to door rather than talk to anyone that is suggested to you.) Ask if the association has sued anyone in the past 10 years.

noise: visit the place a few different times of the day to see what the light and noise level is like

All this said, for us, for now, condo-living has been the right choice. We don't have to mow or do any exterior maintenance, which can be time consuming. The downside is that the woman that is the condo manager is a nightmare. She is retired and has no hobbies, so making sure that we all tow the line is her reason for living. That said, she hasn't really requested anything outside of the bylaws, she has just been relentless about any tiny deviation. My husband would like to replace the windows, but we can't. He also doesn't want to mow, so we live with it.

As for closing, find out EXACTLY what you need to bring. We came with our checkbook, prepared to write the largest check of our lives, and were told in the closing the only check that would be acceptable would be a cashier's check directly from the bank. Luckily, we were able to have my hubby's parents wire the money on the spot. On top of this, there were last minute problems with the title. Don't worry about being a pest, this is your money on the line, feel free to be assertive.

Good luck and happy home hunting!

-- Anonymous, July 10, 2000

We recently considered buying a house, though we eventually decided against it. I had a huge yen for a house a few years ago, but after reading, and reading, and reading about the topic, we realized it wasn't appropriate for us at this stage. I strongly recommend taking a trip to the library, and then to a large bookstore (for recent titles), and reading or skimming a lot of books until you aren't learning anything more. There are just so many things to consider before you make a decision.

One thing that we realized after a lot of discussion is that we weren't prepared to let other people tell us how to buy a house. Saving for retirement, after-tax investments, vacations, and so on is very important to us. That's not possible if you let the bank decide how much money you can spend on your house. A couple of decades ago, the maximum monthly payment you could arrange on a house was 22% of your gross income; now 28% is considered normal, and lenders often qualify people for payments that are much higher. Even with the tax breaks, that's a whole lot of money.

We want to buy a house eventually, but only when we have no other debts (damn student loans!), and when we have a minimum of 20% saved for a downpayment. We've really liked taking the money we save by being renters and tossing it into our retirement accounts and other savings while we're still young and it has time to compound. Learning to be careful about money has made us realize we're not willing to stretch to make mortgage payments; we're willing to pay up to 25% of our monthly income, but not more. We want to enjoy our house, not be slaves to it.

In the meantime, it turns out not buying was the right decision for us: I received a postdoc appointment in Paris next year and my husband was just offered a job there as well. No house payments to worry about during our year in Paris!

-- Anonymous, July 10, 2000

love this thread! just bought our second home 4 months ago (thats 'second home', as in 'second one we have owned'!!) About closing....keep in touch with your title company, they should be sending a letter with specifics on closing soon. Call them often and early-ask what to bring (either wired funds or certified check usually), picture ID and tylenol! Depending on your type of loan, it can take from 1-2 hours to close. Ask them if the lender has given them all the docs they need, and if the title search is done and clear. Ask your realtor if they have in-house attorney they use or if you need to retain your own. Do a final walk thru the day prior to closing, document any problems and have it incorporated into the closing agreement. HIRE YOUR OWN INSPECTOR. We bought a new build here, had the inspection, found a few things and saved headaches by having things that need to be fixed written into the closing agreement. Made the contractor also sign a seperate letter to fix everything. New builds come with a year warranty on almost everthing, buy a heating/cooling warranty after that. We rented for years prior to buying our first home, best decision we made, for us. It isn't for everyone, if you move alot with your job it could be a pain unless company picks up costs. Definetly a privacy-security thing for us, and yep, alot of $ goes to the yard/decor/personal esthetics, but we too wouldn't have it any other way! Also, go to Home Depot or wherever, and buy a few good do-it-yourself repair books...most home repairs are really easy, we have learned tons of stuff over the years and save lots of $ doing things ourselves (except for electricity-won't do that!) Take care and good luck!

-- Anonymous, July 10, 2000

Last week, I signed a contract on a condo and I hope to close before the end of the month. It feels like things are moving really fast, but I have been researching this decision for almost a year now.

I found a place just a mile from where I have been renting. The layout and fixtures were recently redone in just the style I would have picked if I were doing them. I decided what I felt comfortable spending and stuck to it (even when I was approved for almost 60% more). To rent a place comparable to what I am buying would cost $100- $300 more per month than my mortgage payments and association fees.

For me, this is the right decision.

-- Anonymous, July 10, 2000

Buy a house, BUT, (and this is a biggie) get your own house inspector AND GO WITH HIM! Put on a pair of coveralls and go over the place right alongside. Every single nook and cranny! Ask every question you can think of about everything that looks suspicious. Look at the plumbing, the wiring, the crawl space, the heater/air conditioner, furnace, siding, bathrooms, shingles, decking, gutters, brickwork, and fences. Ask who did the work, when it comes to improvements. If the previous owner did, be double sure to carefully check his work. Ask about every crack in the walls, leak stain, wood rot, insect damage, gnaw mark you find. Don't be nice, be investigative!

We have had a problem with everything mentioned above AFTER the inspector gave it a clean bill of health. Some of the highlights:

Skylights in the garage had been *nailed* to the roof, right thru the plastic dome and the nailholes sealed with roofing cement.

Trying to find how rats had gotten in the attic (and once in the kitchen!) led us to a part of the exterior with an overhang where a bathroom had been extended for a larger bathtub; the underside of the overhang hadn't been finished and was completely open to the interior wall.

The deck was built on untreated wood pilings. Got wood rot that spread to the house because the deck was built too close to the siding, trapping water. Had to replace a portion of the sill plate (the thick wood piece on top of the foundation), jacking up a corner of the house to do it; *that* was fun.

Two trees grown too close to the house, causing rain gutter problems and wood rot behind them.

Electrical wiring was supposedly replaced at a renovation; found way too much old varnished cambric-insulated wire still in use.

The problem is that most of this stuff showed up years after we bought the house. Don't get me wrong, we love our house and I sometimes enjoy being Bob Vila, but it has been one thing after another that could have been caught with a competent inspector and should have led to some adjustment in the price of the house. Spend a *lot* of time finding a good and thorough inspector and check him out (friend's recommendations, local hardware store recommendation, BBB, etc.).

And yes, it is an older house (built in the 20's), but everything I said applies to newer houses as well. When subcontractors are paid according to the number of walls they put up in an afternoon, quality ain't job one.

Caveat emptor, y'all.

-- Anonymous, July 10, 2000

Two words: Plumbing Inspection. Man, everyone I know who has bought a house in the last three years has had a enormous and expensive plumbing disaster within the first year. If nothing else, have the lines roto-rootered to see if there are any serious problems.

As for the money situation, I have to disagree with the sentiment here:

Saving for retirement, after-tax investments, vacations, and so on is very important to us. That's not possible if you let the bank decide how much money you can spend on your house. A couple of decades ago, the maximum monthly payment you could arrange on a house was 22% of your gross income; now 28% is considered normal, and lenders often qualify people for payments that are much higher. Even with the tax breaks, that's a whole lot of money.

You don't have to buy the house your bank tells you can buy. Our monthly payment is less than 20% of our gross income. Based on the amount the bank said we'd qualify for, we could have spent about $60,000 more on a house, and that was when Jeremy was working part time. Right now, we could probably qualify for twice the loan we got. Why didn't we max ourselves out? Because we looked at those monthly payments and said, "No fucking way." Because we do save for retirement, vacations, and emergencies. Because we weren't helpless pawns.

It seems like a lot of people make the mistake of telling their realtor the prequalification numbers -- you don't have to do that, and you shouldn't. Hell, you can lie to her -- we did. We let her think we were within a few thousand dollars of our maximum loan amount, when in truth that was the maximum loan amount we had set for ourselves -- the bank would have given us plenty more.

You should not go into buying a house thinking it's the only investment you need, because real estate is actually a pretty crappy investment most of the time. Know your own budget and how much you need to put away for retirement and the things you can't (or don't want to) live without, and choose your home accordingly.

Also, do the math and figure out whether you really want to save enough money for a 20% down payment. Your monthly payments are barely affected by that (for us, it would have meant less than $100 a month) and you may do better leaving your money in the stock market, especially if you plan to eventually start paying more than your minimum monthly payment and get the loan paid off sooner. And by the way, that's a really good idea, as well. We plan to start doing that next year, I believe.

-- Anonymous, July 10, 2000

60 seconds of watching some guy on Oprah convinced me a house is not an asset.

He divided investments into assets and liabilities. (Assets generate more money, liabilities, the opposite)

It made such perfect sense, that I bought into immediately.

(OK, go ahead and laugh--but it did make sense (cents))

He of course owned a very nice home and cars etc. But paid for them outright when he could afford them.

Hey, and I gave the same message in about 60 seconds of reading.

-- Anonymous, July 10, 2000

...that is, if you're a slow reader

-- Anonymous, July 10, 2000

Beth noted that she disagreed with my statement that if you let the bank decide what you can afford, instead of choosing that number yourself, you'll end up paying too much to save money elsewhere. However, I don't think we're really disagreeing here. All I was saying was that people should decide for themselves what they can really afford. With only one exception, everyone I know who's purchased a house, however, has done it the other way around; they went to the bank, got their maximum loan amount, and went to purchase a house priced somewhere near that number. Assuming they bothered to pre-qualify at all.

Anyway, the point was to place a house payment amount relative to the other money you want to save/spend, not relative to what some bank wants to lend you. They don't care if you're slapping together burritos at Taco Bell when you're 70. You, however, may care a lot.

-- Anonymous, July 11, 2000

You're right; we weren't really disagreeing. I guess I was only disagreeing with the idea that it's a reason not to buy a house. It is possible to finance your home without putting every dime into it.

-- Anonymous, July 11, 2000

I just bought a house - closed in Feb. We undertook a huge amount of remodeling before we moved in - and during our move in. The house is a 1925 Bungalow, and it had its share of problems, but we were prepared - we had our own inspector!

Here are my hints:

Interview your real estate agent. Interview ten of them. Make sure you are comfortable with their personality and converastion style.

Make a list of the things you want. Write a paragraph or two about your dream home and what you would do in it/with it. Take this to your real estate interviews.

Buy some books. Three books that were helpful - Real Estate for Dummies (I know, I know, but it really simplifies concepts and terminology) - 101 Homebuyers Mistakes, and 101 Tips and tricks to Real Estate.

Interview mortgage companies. Get prequalified. Go to another. Get prequlified. Find the lowest rate. Then get pre-approved. Get the letter in writing. Make sure the Lender is willing to write multiple cover sheets for you (so you can decide on what to offer based on the number of bids on properties). Make sure your prequalification fee is refundable upon close.

Get your own inspector. Ours was great. We saved thousands of dollars by adding life-safety contingencies to our contract.

Read and understand a contract before you make a bid. You have to work fast when making a bid, so it's best to know the format of the contracts.

Step back after you fall in love with a property. Take a friend to view the property, ask them to be critical - you'll gloss over many faults if you bid on impulse.

Save some cash - don't blow it all on your deposit or down payment. You'll need it for all the tiny things you'll need to repair or buy.

And last but not least - if you are remodeling - do it before you move in. There is really nothing worse than living in a construction zone. We tried - and we're still not entirely unpacked 4 months later.

-- Anonymous, July 11, 2000

Thanks for all the good advice.

I would definitely like to second Beth's advice that you don't need to tell your realtor how much you prequalified for...

I feel like as soon as my realtor found out what my salary is and that I have no other debt, she started telling me what she thought I could afford, and what range I should look in, in order to get the best tax break. The fact is that the thought making a mortgage payment that was 2.5 times more than what I am paying in rent now was scaring the crap out of me. I went to a financial advisor to see what she thought, we crunched some numbers and discovered that the difference in tax offset between what I wanted to spend and what my realtor thought I should spend was only about $1000.

So I got prequalified, but then told my realtor that I wanted to look for a house that was about $30K less than what I prequalified for.

I found my house in an Open House last Sunday, signed on a contract this weekend. My realtor has yet to see my house. When I was bidding on the house, she was encouraging me to take the first counteroffer I got from the seller. I ignored her, and made a second counteroffer and saved myself about $2000 on the house.

I have some spotty credit, because I have been dumb about paying my bills in the not too distant past. The mortgage broker that prequalified me told me that he could only get me a loan with 10.25% interest rate. When I told my realtor I was going to shop around to see what else I could get, she told me she really didn't think I was going to be able to do any better "given my situation".

The next lender I called looked at my credit history, said that since I hadn't had any problems in the last year, he would be able to give me the same loan, with the same down payment at a 8.25% interest rate.

So, basically, my realtor is making a commission for a house that I found on my own, and for giving me bad advice.

-- Anonymous, July 11, 2000