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First Time Home Buyer: Lessons Learned?

  1. #1
    Member Crconnor18's Avatar
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    First Time Home Buyer: Lessons Learned?


    Most have been through this I feel as we move on with lives.

    Title covers the question. I’ve spent some time shacked up with the ‘rents in efforts to save up a proper down payment for a permanent residence. I have a goal in mind to cover 20% of the advertised sale price while leaving a savings balance of 3-6months of expected costs of living.

    I’ve never purchased a home and looking to gain any advice, lessons or things to avoid as a first time home buyer.

    Budget wise I’m looking to keep the price within a monthly 28% of my gross monthly income.

    I’m looking to avoid a condo but lean more so towards a little 2bdr 1.5 ba w/ a garage or a space to set one up eventually. North shore areas North of the Pike, within 495 ring is the thought for now.

    I am thinking with the current perfect storm of gov’t assistance, limited eviction windows and increased work from home policies that I’ll be holding off until next fall/Summer. I expect to be in a position to buy come next June ‘22 based off my budget and expected savings contributions.

    Anyone have experience without putting the 20% down? Is there a required period where PMI is applied even after you meet the 20% equity in the ownership? (I.e a not being able to re-fi after meeting the 20% re remove PMI).

    I’m open to any criticism, advice, warnings or such as I plan to do this once and do it properly before I end up with an Ex wife who takes half of it from me in 20 years.

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    Last edited by Crconnor18; 08-17-21 at 10:44 AM.
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  2. #2

    Re: First Time Home Buyer: Lessons Learned?

    General notes and nitpicking if you have the luxury to do so

    Try not to buy on a flow through double yellow street if you're planning to live there with kids
    You can't change neighbors. If they have loud kids, loud cars, loud dogs it will be there forever
    I personally hate it when the mailbox is across the street
    Check what the commute would be like to get into your street/area at 5pm and 9am traffic wise
    House inspector will miss a lot. Try to have specialty inspectors for specialty area (electrical, chimney, plumber) to avoid expensive problems
    See what future development and zoning is like around that house
    Ideally visit after heavy rain, snowmelt to see what drainage is like
    Try to avoid shared/joined driveways

    in this market most of those things can't be tested as things sell immoderately and often with no inspections, but that doesn't mean that those things aren't important in a place you'll live for years

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    Last edited by Vovchandr; 08-17-21 at 12:16 PM.

  3. #3
    Kosher Assassin Stoneman's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Avoid HOA's like the plague...Covid!

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  4. #4

    Re: First Time Home Buyer: Lessons Learned?

    Do you wanna make money or buy the home you want and how many years do you expect to stay

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    Jamnuts jhawley's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Shitty house in a nice neighborhood. Buy it cheap (not sure that is in this market) fix it up, and have a nice place

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    Member Crconnor18's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Avoiding any/all HOAs

    Living the bachelor life for now to just want enough space to be comfortable and plenty of space for the toys.

    I’m open to make money vs forever home. Plans to marry rich

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  7. #7
    Lifer gixxer72's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Quote Originally Posted by Stoneman View Post
    Avoid HOA's like the plague...Covid!
    Used to feel this way, now totally disagree.

    The rules of our current HOA are easy to abide by and protect our property values. Itís also refreshing not to have neighbors with piles of junk on their property and homes in various states of disrepair.

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  8. #8
    Lifer loudbeard's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    I wouldn't be opposed to an HOA, but I would be cautious. As gixxer said, when done well they're a value added service. When done poorly they can be a nightmare. The take away is educate yourself on what HOA's do and how they can vary from development to development. I would avoid buying in an old building or development with an HOA as the price to upkeep infrastructure rises with age of property. I would also avoid buying into an HOA if you have a shitty old camper you want to keep outside

    Here's a nice little article on understanding HOA's

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  9. #9

    Re: First Time Home Buyer: Lessons Learned?

    HOAs not for me. Even with 2 acres and no HOA in a small town now, I wish had gotten even more land aka privacy.

    That being said it works for many people.

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  10. #10
    Lifer loudbeard's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    First Time Home Buyer: Lessons Learned?-captain-jpg

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  11. #11

    Re: First Time Home Buyer: Lessons Learned?

    I'm a weird guy and my life priorities are all out of order, so I say if you have the flexibility of no kids/wife/need good schools I would buy whatever is gonna build wealth in the long run. Cash flow or equity builder. If you're in a market where you can save 20% down just by staying with the parents, I'm guessing your market is cheap enough (& not competing w' cash investors, foreign investors, house flippers, & wall street buying up tracks of single family homes) where you could scan constantly and hustle the seller to buy something under market for a quick sale that needs work, then owner occupy and renovate while living there; then in a year buy another one or do a refinance and buy another flipper. 10-15 years of that hustle and retire. Make adjustments to the toys/lifestyle temporarily based on where you're living by renting storage units, leaving bikes at friends places, street parking, or selling the bike temporarily and buying again later. HOA/area/parking/layout/taxes/nearby development are just pieces of the puzzle; all offering positives and negatives. Example: I noticed HOA areas have good schools and can attract higher end long term, moderate cash flow, low hassle tenant. Can make a great rental where someone is paying off a loan you took while the value goes up, but it makes a lousy place if you store your race trailer. Don't write it off; stick to the plan of keep it a numbers game and just make adjustments.

    hoping you're not a weird guy, so you'll prob. just buy whatever fits your lifestyle based on what's available after looking for a bit. For the most part anything you buy now will go up with the supply and demand issue we're having now; so you'll get lifestyle benefit and make money just buying whatever you want and living there for awhile.

    The "waiting to save 20% down" thing imho is really up to you and what your goals are. I personally don't think matters. Unless you got an FHA loan, once you get to 78% you can ask the mortgage company to drop it. The time you wait to save 20% down may be the time that house just went up in value and you're chasing inflation. So pay an extra $800-$1,500/year in PMI until you pay down to 78%; in that time you would have paid down principle as well. I got one house for $340k which went up to $460k in about a year...I went in with 10% down. If I waited to save 20% down I'd have to be ready to put down close to $100k. Get in early. My biggest regret is that I should have bought in 2012-2013 when I was looking at a $350k duplex in SoCal with an Ex. She said no, so I walked. Had I bought it myself I'd be over $500k in equity; and that doesn't include the fact that tenants would have paid down some of that loan by now. That investment is now modular equity: sell the whole thing and buy $500k of cash flowing rentals out of state. Down payment on a business. Borrow out of it to fund another venture. Rinse and repeat and buy 3 more of them. Hookers and blow.

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    Last edited by breakdirt916; 08-17-21 at 02:19 PM.
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    Bizarro Zoolander Petorius's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Don't trust agents, they are indoctrinated to believe in certain "best practices" which really just serve to close the deal as fast as possible. They often legitimately believe that these things are in your best interest, when they are not. This is especially true in the current market. "You need to put your best foot forward and lead with your best and highest", "You'll never get the house if you don't waive inspection and appraisal contingencies", "Escalation clauses put you at a huge disadvantage", etc... It applies on both sides of the deal. This part of the industry is absolutely RIPE for disruption.

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    Angry Gumball RandyO's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    "saving till I have 20%"

    problem is, real estate prices are inflating so fast, you might wanna settle for 15%, or even 10%, to get a 25% better deal than you will once you save the 20%

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  14. #14
    (4) Try not to be a dick. PurplePackage's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    The best advice for a new home buyer is to find a plot that serves you well. Don't live next to an airport, highway, or far away from your job. Traffic does not get better with time. Location, location, location.

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    Re: First Time Home Buyer: Lessons Learned?

    Find a girl who already has a house. What? I'm not the only one thinking it.

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    Super Moderator OreoGaborio's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Well if murphy's law and my crystal ball is correct, the housing market will crash huge in the next 5 weeks..... Don't ask me why, I'm not ready to make any kind of announcement just yet.

    Regarding 20% downpayment... for me, P&I was estimated to be around 150-200 dollars per month if I put down less. I'm pretty sure the market is going to plateau for a good long while, so I don't see too much of an incentive to put down less than 20% at this time and invest the difference. Keep saving what you can, invest as much of it as you're comfortable while you still can, and aim to put down 20% when the time comes. That's what I'm doin.

    Last thing I'll say is that I wish you the best of luck. My GF and I have been looking for TWO... FUCKIN... YEARS. It's a brutal market right now for buyers.

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    Last edited by OreoGaborio; 08-17-21 at 06:06 PM.
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    Super Moderator TheIglu's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    I wouldn’t buy right now.

    Bubble is higher than in 2007. I have no interest in being upside down again.

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    Super Moderator OreoGaborio's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    We're definitely on a bubble, but I'm not seeing the ingredients for a crash - CERTAINLY not the same ingredients that we had in '07. I don't see demand going away and the supply sure as hell isn't going to skyrocket any time soon. Interest rates may rise a bit in coming weeks, but...

    Worst case, I think it'll deflate a little, then plateau until what WAS the natural market appreciation rate catches back up... like a ratcheting high bar if you will.

    At least, that's what I hope, given my position.

    Of course it's prob not worth getting into an long diatribe about what we think is going to happen in the future... the market blows but people still need places to live. Some more than others. You're in the fortunate position where you don't need to move, unfortunately for others, they do.

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    Last edited by OreoGaborio; 08-17-21 at 08:40 PM.
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    Member Crconnor18's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    A lot of great info! Definitely open to jump on a deal for the dream home of it appears and eat PMI though at this point finding a lady with a house already is a win win.

    Stacking as much cash as I can with the ‘rents while I wait for a window of opportunity is nice given rent in the city (or relatively close) is $2k or so per month for a 1bdr shack. The idea of not “having” to move gives me the upper hand financially but you also play chicken to see how far you can last under the same roof of Mom & Dad.

    Working in Bedford on the base gives me some flexibility on living within the belt or outside which is appealing. Avoiding buying in the near near future is the thought. Luckily I’m near the 15% milestone so can jump at any given moment while not feeling the pressure to pay over asking or waive major inspections as I see some may have. The idea of seeing the areas in rush hours/extreme weather conditions is something I didn’t consider.

    The goal is to buy without needing to sell any of the toys.

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  20. #20
    Your Father csmutty's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Quote Originally Posted by OreoGaborio View Post
    We're definitely on a bubble, but I'm not seeing the ingredients for a crash - CERTIANLY not like the one we had in '07. I don't see demand going away and the supply sure as hell isn't going to skyrocket any time soon. Interest rates may rise a bit in coming weeks, but...

    Worst case, I think it'll deflate a little, then plateau until what WAS the natural market appreciation rate catches back up... like a ratcheting high bar if you will.

    At least, that's what I hope, given my position.

    Of course it's prob not worth getting into an long diatribe about what we think is going to happen in the future... the market blows but people still need places to live. Some more than others. You're in the fortunate position where you don't need to move, unfortunately for others, they do.
    I see it exactly opposite. Right now you can't evict renters and can't foreclose. When that ends I see the housing market crashing pretty hard.

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  21. #21
    Burns retinas nhbubba's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    PMI isn't so bad. I paid it for a few years until I had paid the loan down a bit and the market had risen. 20% was a pipe dream for me.

    I guess my advise is be flexible. Pretty sure I got my house because I was the only guy that stuck around. I'm sure everyone else had contingencies and families to settle and all that. Not me.

    I agree that it would suck to be buying in during this market. I also agree that this has to be a bubble. The zillow estimates on my house cannot possibly be right!

    But that is an easy position to take when you are comfortably locked in, building equity and paying <2% APR.

    My crystal ball is as shitty as the next guy. Ultimately I wish I'd bought a condo 2-3 years out of school instead of blowing so much on rent. Wonder where I'd be had I done that.

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  22. #22

    Re: First Time Home Buyer: Lessons Learned?

    The problem now with buying in this market is that asking and sales price far outs cede real home value. Not sure banks are giving loans on homes selling for 30% over appraised value ! Most homes in my area are being bought with cash. Is their a bubble? Not sure the market is being driven by old school loans at this time. Inventory is low and demand is still high. Anyone's guess how long this spike will last?
    I don't see a burst in the bubble for a long time, more like a slow leak. Find a home that needs work in a good neighborhood is the best bet when buying now!

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    Last edited by MUZ720; 08-17-21 at 07:53 PM.

  23. #23
    ain't nuttin wrong w/that scubasteveRR's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Quote Originally Posted by nhbubba View Post
    My crystal ball is as shitty as the next guy. Ultimately I wish I'd bought a condo 2-3 years out of school instead of blowing so much on rent. Wonder where I'd be had I done that.
    no shit right, i should have just bought a house out of high school. if I only knew then what I know now... 5 years ago I thought prices would start coming down again after things started to get pricey again after the 2008 housing crash. boy was I very wrong.

    you really never know what's going to happen. could crash in 5 weeks, could continue to shoot up for another couple years. what I saw out there when I was looking was dismal supply and huge demand. I don't see the demand going down at all and I think houses under 1million are going to continue to rise in price sharply.

    Just bought my first condo in March. It's tough out there. stuff gets sold so fast and for so much it will make your head spin. I feel I got lucky to even find a place in my price range and time frame, but I NEEDED a place to live or else I would have been paying TWICE as much on renting a place or out on the streets. luckily you definitely have time on your side, but I thought the same thing.

    The key for me is when I move on to that single family down the road I'll be keeping this and make it into a money maker while still building equity as I intent to rent it out. Or i'll be buying a ski house and renting that out when not in use and staying here.

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    Last edited by scubasteveRR; 08-17-21 at 07:59 PM.

  24. #24
    Lifer isaac_'s Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    • Read every document you receive and ultimately sign - even if it's a boilerplate/standard. You need to be aware of how to protect yourself.
    • You CAN walk away even after P&S agreement is signed - it just might be trickier.
    • Do not waive inspection or mortgage contingency
    • Find yourself a great mortgage broker and/or shop around for mortgages. I went the mortgage broker route and he was hands down more help than an agent at times.
    • Same comment about a lawyer... don't just go with someone your agent knows.
    • Know your market - some require above asking price. Some are OK at asking prices.
    • Ask for the moon. The worst thing they can say is 'no.'
    • Everyone wants to get the most out of their homes... but it's not always about the money. Sometime it's about expediency. When I bought my house, I was frank with the seller's agent (through my agent)... I asked what it would take ($) for the seller to lock-in and avoid a bidding war. We both walked away very happy.
    • I may be in the minority, but I don't view *my* dwelling as an investment. It's my homestead. Where I put my head at night. If it goes up in value, great. While I don't want to lose value, I'm not sweating it. I feel people get caught up seeing every home as an investment opportunity. If you want an investment property - look for an investment property.

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    Last edited by isaac_; 08-17-21 at 09:07 PM.
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  25. #25
    Lifer LuvDog's Avatar
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    Re: First Time Home Buyer: Lessons Learned?

    Quote Originally Posted by OreoGaborio View Post
    Well if murphy's law and my crystal ball is correct, the housing market will crash huge in the next 5 weeks..... Don't ask me why, I'm not ready to make any kind of announcement just yet.

    Regarding 20% downpayment... for me, P&I was estimated to be around 150-200 dollars per month if I put down less. I'm pretty sure the market is going to plateau for a good long while, so I don't see too much of an incentive to put down less than 20% at this time and invest the difference. Keep saving what you can, invest as much of it as you're comfortable while you still can, and aim to put down 20% when the time comes. That's what I'm doin.

    Last thing I'll say is that I wish you the best of luck. My GF and I have been looking for TWO... FUCKIN... YEARS. It's a brutal market right now for buyers.
    Hopefully closer to the club for you?

    As far as the market goes... we'll have a correction in the future, that's for sure. But around here it will come back.

    The suburbs are still hot... cities are starting to come back, but I agree that once the eviction moratorium is up, then we'll see come funky things going on with rentals and commercials real estate. For people sitting on tons of capital, it will be a great opportunity to gobble up properties and wait it out for the next peak.

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