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Mama Deb
mamadeb
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Mama Deb [userpic]

My landlady just had the house appraised.

I work in a real estate office. I know what that probably means (probably because she could also be doing it for insurance or tax reasons).

If she's thinking of selling, we have to start thinking of buying something. Not this house, unless it's in our price range (although wouldn't that be nice? She has a gorgeous kitchen.) but a house or a condominium. But buying because I'm tired of living at the whim of someone else. We've been thinking along those lines anyway. And our lease is up in September. Which might be enough time.

So. What would be the first step?

Comments

Step 1. Make a list of all asset accounts and debts.

Step 2. Call mortgage broker. Find out the mortgage you qualify for. Essentially "pre-qualify" which means it's waiting for you to use it.

Step 3. See what that will buy you.

And from there it depends on price range, options, and such. But generally, figuring out what you have, what you owe, and what you qualify for.

Houses

Seems like everyone's getting a house:) It's a cool trend.

1. Get preapproval for a mortgage. Not just prequalified, preapproved. That way, you'll know how much you can afford and what price range.

2. Go through listings. Online, newspaper, etc. Make a list of things you want and things you need in a house.

3. Find an agent that you trust. Get recs from friends who've bought houses. They can tell you the best people in the area.

4. Don't discount houses that fit all your needs, but not all your wants. Make sure you give them a second look.

5. Don't rush into anything. Houses will be on the market anytime you look (not the same houses, but similar). Don't get down if your dream home is out of your price range or off the market. It's a large market, you'll find something you like.

Re: Houses

She suggested exactly what we did. :)

Figure out what you can afford, both amount and flow. You'll want to get pre-approved for a mortgage, but my experience is that lendors will approve you for larger amounts than you'd actually be comfortable with if you look at the "what this means on a monthly basis" calculation. So start trying to get a price range you'd actually be willing to spend in.

You work in a realty company; I presume you know how to find all the relevant listings. :-) (And other service providers, for that matter -- mortgage, agent, attorney, etc.)

Start looking at places. Take notes during or immediately after each walk-through; don't rely on your memory to tell you which had the decent kitchen, which the attrocious floor plan, and so on. Don't worry about getting all the details on this pass; this is your first-pass filter. The questions you want to answer on this pass are "does this location work?", "can we imagine our stuff working well in this house?", "does this have basically the kind of space we want?", etc. For you, also "can we kasher this kitchen?" and perhaps some size contraints in the bedroom.

Keep in mind that some problems can be fixed for money or sweat (consider it an addition to the closing costs) and some can't. Ugly wallpaper can be fixed; a weak foundation can't be.

When I was doing this for the first time I got a lot of benefit from a book (title forgotten) by Bob Villa (the "this old house" guy). That was 13 years ago so maybe that's not even the specific book you'd want now, but there are books out there that will give you advice on what to look for in walk-throughs and in paperwork. I have a friend who's a civil engineer who did pre-inspections for me on the short-list houses (ones I would have made offers on); if you know someone like that, I'd say it's well worth buying such services. This is the pre-offer sanity check; mine worked fairly cheap. You also want the real inspection, but the pre-inspection saved me the effort on one house that meant I didn't have to go through the offer-inspect-withdraw cycle.

You'll want to get pre-approved for a mortgage, but my experience is that lendors will approve you for larger amounts than you'd actually be comfortable with if you look at the "what this means on a monthly basis" calculation. So start trying to get a price range you'd actually be willing to spend in.

Remember to add taxes and insurance to the calculation! Our actual mortgage part of the payment is only about 2/3 of the total cost.

When I was doing this for the first time I got a lot of benefit from a book (title forgotten) by Bob Villa (the "this old house" guy).

I don't know about that book, but we found a book called something like "Questions Every First Time Homebuyer Should Ask". Pretty useful.

Remember to add taxes and insurance to the calculation!

Also condo fees, if you buy a condo (I don't know what the housing stock is like in your area).

What everyone else has said about getting preapproved and figuring out wants and needs. When I was looking, I wanted a kitchen that had a reasonable amount of space for milchigs and fleishigs, good light, and reasonably quiet. Wants included a guest room and a sukkah porch, and I was lucky enough to get both, though I almost didn't, since I had time limits and almost bought the place I saw before this.

Around here (in MA), there are first-time homebuyer classes, which are not only informative, but can also get people a slightly lower rate on the mortgage. It was offered through the city, I believe. There may be other first-time homebuyer offers out there as well.

Good luck.

What They All Said.

Especially the part about figuring out how much you can comfortably afford to pay a month and how much house that will buy you.

And take it from someone who's buying her second house now-- your house is out there. It will wait for you to find it. Or maybe it's waiting to go on the market until you're ready to find it.

But if you're meant to buy a house, the house you're meant to buy is there. Don't give up, keep looking (it took me almost a year to find this house, although the second one showed up in only two months), and the house that will say "I'm yours" when you walk in the door will show up, eventually.

And don't be afraid to be the second offer on a house. The first one might fall through, and then it'll be yours. There were two previous offers on this house when I looked at it.

(Yes, I get all anthropomorphic and destiny-centric when talking about finding houses. )

Ah, but I wouldn't be working on my own timeline.

If she's selling, we need to find a place before this house changes hands and if she's not, we need to find a place when our lease is over or negotiate a month-to-month or break it.

If you're going from a house to another house, you can afford to take the time.

Five months is a lot of time to find a house.

IIRC, I did it in more like three weeks. I admit, I had a really good realtor (Realtor Bob - recommendations enthusiastically offered for anyone buying in South Minneapolis or nearby suburbs!), and I wasn't really picky.

First - what everyone else has said.

Second - make a list of what you want in a house. Split it into three categories:

1) Must Have
2) Would be nice
3) Only in our dreams

I wanted three bedrooms, a certain size of main floor / entertaining space, main floor and sleeping floor bathrooms, hardwood floors, and central A/C or a heating plant that easily supported central A/C (because I was also going to be adding the anti-plant allergens filter). That was my Must Have list.

When I started looking at houses, I bounced back and forth between 2 and 3 bedrooms - I ended up going with 3, which was too big, but I knew it was, and why it was, and that was good. When I got married 4 years later, it was a very good thing - that 3rd bedroom was "her" space, to do with as she wished.

I would have like a fireplace, but that was about a 2.5 wish - somewhere above would be nice, but not quite in my dreams.

Short form - get pre-approved, decide how much you are willing to spend - are you willing to be house-payment poor?, and get the best possible realtor.

Five months is a lot of time to find a house.

As a data point: When Dani and I bought our house we started looking in late April, had a signed sales agreement sometime in June, and closed in August. Even with Sundays being the only practical days to see places, we were generally able to see 5 or 6 in an afternoon so it only took a month or so to run through everything on the market that met our minimum requirements.

Going from house to house can be hard if the ability to buy the one is contingent on your selling the other. But that's not your situation. (I owned a house when Dani and I went looking, but the mortgage companies were so forthcoming with offers to lend outrageous amounts of money that I was able to say to them "ok, the delta between what we're willing to spend and what you're willing to lend is three times the outstanding balance on my current mortgage -- so how 'bout you remove that contingency clause?". Of course, this is Pittsburgh.

If she's selling, we need to find a place before this house changes hands

But aren't you in a multi-unit building? (Remembering the comment about your tub supposedly leaking into her place.) Or are you afraid the new landlord won't be willing to renew the lease?

> we need to find a place when our lease is over
> or negotiate a month-to-month or break it.

You shouldn't have to break it; just write into your offer that you need to close by (date lease expires).

If you're going from a house to another house, you can afford to take the time.

Well, the first time, I was going from a rental in a two-flat to a house, but I didn't have to worry about my lease not being renewed. I ended up closing about 6 weeks before my lease ran out, so I had plenty of time to shift my stuff (and rip out carpet in the new place).

Still, if you're meant to move, your house will find you. I expected to have to look for months to find another one, and this one turned up, practically on my doorstep, in 2 months.

I will Think Good Thought for your search.

We live in a two-family. It's considered a private house.

What they all said.
Except a couple other things. She could have been having it appraised to refinance or to take out an equity loan. We've had our house appraised several times since Seth bought it 4 years ago.
Second, I think NY law will be the same as what I'm familiar with which means that you'd have the "right of first refusal" which basically means that you get to decide if you want to buy before anyone else does. You never know, it might turn out that it IS in your price range.

Pay off any debt you can, especially credit cards. Get preapproved so you know what your price range is. Find an agent. ;)

Another "what they all said above".

Especially re: easily fixable problems vs. highly unfixable problems. When my then-husband and I bought our house, we got it for about $5K less than what comparable houses were selling for because we were the only people who weren't freaked out by the crayon drawings the previous tenants had left on the living room walls. (We'd even have considered leaving the drawings for amusement, if some of them hadn't been so disturbing.) A few rolls of wallpaper later, you can't tell they were there.

Definitely figure out what you're comfortable paying, including property taxes and insurance. The ideal situation is to find something that you can still manage to pay on _one_ of your paychecks, in case one of you ends up out of work for a time, but I don't know if that's feasible in NYC.