Buying a Home can be a Nightmare
How to buy a house in such a competitive market
The housing market is at it's best right now because so many bank owned properties are being sold for half their value. The problem is that people find a nice home at a reasonable price and are being out bid by investors that have cash. Money talks more then a mortgage.
Couples are being preapproved for mortgages and can afford the price of the home but they will never have a chance to buy a home because investors are buying them up like crazy. Here in Jacksonville it is nothing to get a 4 bedroom, 2 bath with a pool for about 98,000.00. When you look at the history of the house, that same house was purchased in 2005 for $130,000.00.
So what are new home buyers supposed to do? There are some banks (Wells Fargo) that are selling properties to occupants only, which means they only want families that can get a mortgage to buy them. Before you look at a home, ask the realtor how many other offers have been placed on the property. They can never tell you what the other person bid, but they can tell you how many other offers there are. Pay attention more to foreclosures and not short sales. Foreclosures that are owned my the bank are more then likely to be updated. Short sales are bought as is and you may get stuck with a house that needs a roof, ac unit and has many problems.
Patience is your biggest virtue. You may look at many houses that you fall in love with before you can finally get a contract. Be prepared that every time you enter into a contract you will have to pay for an inspection and appraisal. My suggestion is to have the inspection done first so that you don't waste money on an appraisal if the inspection goes badly. Inspections run about $425.00 and appraisals are about $400.00. Every time you go into a contract both have to be done.
Stay on top of your realtor. They need your business but they have many people just like you buying homes. If you don't hear from them in a few days contact them.
You will also have to pay a binder's fee which is usually 1% of the houses selling price. Be prepared to wait for this money if you decide you don't want the house. Some sellers are slow to sign the paperwork to get your binder fee back.
Houses that are FHA bought only require 3% down and very low interest rates so you could possibly get a home for under 7,000 down if the seller decides to pay the closing cost. You will also have to shop around for home owners insurance once you find a home that you plan on purchasing.
Look at more then one home. You might find a great house that you fall in love with and you stop looking at homes only to be disappointed that it was bought out from underneath you. Always look at three homes at least before you decide on one home.
Buying a home should be a happy time. Make sure you have a good real estate agent and a good lending broker. They should be in touch with each other and with you at all times to see what is going on. They should let you know each step of the way in the process.
Short sales can take up to six months so be prepared to buy a home as is and you could possibly wait a long time to own it. While short sales are selling like crazy because you can bargain down the price by about 6 grand, it still is a long process.
Look at some of the older homes. They were well built and most of the time if they are bank owned they have been updated nicely. The only problem with older homes built in the late 50's to early 60's is the plumbing may not be up to inspection standards, but that is just a small issue. Anyone that can do plumbing work can change out the plumbing. Electrical work is another issue with older homes. But even with these little things older homes are much better then the newer built homes.
Having the opportunity to buy a home is a great adventure. Happy house hunting and I hope these tips have helped.
Major things you should be looking at
When purchasing a home, make sure you get a good inspector. Your main concerns would be how old is the roof, air and heating unit, hot water tank, plumbing and sewer issues. Make sure you call a service that can put a camera down in your sewer especially if you are buying an older home. The sewer pipes may be old and be filled with roots. I know this from experience. Also if it is an older home, check the windows to make sure they are up to date.
You want to spend as little money on repairs as possible when you move in to your new home.