Buying A Home
MrsDe2008
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Things you wish you knew?
What are key things you wish you knew before purchasing a home? Also, what expenses came up that you didn't know about before hand?
We're in the process of finding a home and I don't want any surprises. I'm thinking of everything I know about when it comes to what our monthly expense will be, like: mortgage, PMI (we're putting less than 20% down), taxes and homeowners insurance. Am I missing anything? Also, When it comes to the expense of closing, am I missing anything? Right now I have closing costs (including lawyer's fee's, title, property survey), home inspection...is that it? TIA...
Re: Things you wish you knew?
This. Very important.
Other costs I can think of: lawnmower, hoses, sprinklers, basically all the outdoor care stuff you probably didn't need to think about as a renter.
A person (home building manager) once told me that there are more than 80,000 pieces and parts to a home when you consider the nails and screws. Homes will do things that you don't expect: minor things like door knobs not functioning, to major ones like leaks in appliances, plumbing or basements. The PP who mentioned the emergency fund gave good advice. You should be prepared with one before you buy. Even the nicest, newest homes have fix-it issues.
Ditto on having substantial savings. Owning a house, in my experience anyway, is far more costly than renting. I'd estimate that our expenses doubled each month from when we were renting. Probably more than that, actually.
Some of our expenses that weren't planned (and we are only 3 months in): Buying a new range hood, gutting our finished basement, having a french drain and sump pump system installed, and mold remediation. Also just found out my township has a personal tax that can not be billed through escrow, so that is an annual bill of $1400 that we weren't aware of.
There were lots of expenses I planned on, but totally underestimated how much they'd cost, such as paint (and paint supplies), area rugs, and basic utitilities. I knew that the utilities would be more than when we rented, but I underestimated how much they'd increase.
Things I wish I knew then that I know now:
- I'll never again buy a house that has a kitchen and bath that I hate. I had the very naive attitude of "Oh I'll just renovate it in the near future." I had NO idea how expensive those projects would be. We probably won't have enough money to do those kind of projects for many years.
- Have a TON of money saved, as mentioned above. We have nearly cleaned out our savings on all of the unplanned expenses (and an unplanned car repair and purchase). It's a scary feeling.
- I would've been far more aggressive in my offer and asked for more items to be repaired that were found in the inspection, if I knew then what I knew now about all of the work that needs to be done to the house.
OIl/Propane left in tank - you'll need to pay current owner for whatever is left
Other such things that current owner may have pre-paid that will transfer over.
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Outside expenses tally up quick... lawn mower, fencing, landscaping. On that note I wish we had someone look at a few large trees on our property while having the house inspected. It seems they are dying and need to be torn down. We could have used that as a negotiation point if we knew in advance.
Ugly light fixtures, faucets etc are easily replaced but they price adds up quickly. We bought a small, 6 year old house and still blew through 5K in savings on just items we felt needed to be updated within the first two months of moving in.
BUT all that being said, I have never once regretted buying.
October 13, 2012
Savings, savings, savings!!
Within two weeks of moving in, water started leaking from the master bathroom into the family room below. We have a home warranty. They charged us $100 to send someone out. That someone cut a hole in our ceiling and told us we needed to caulk. He charged us $85. $185 and we were left with an unusable shower, a hole in our ceiling, and what has turned out to be thousands in damages. Home warranty company says "Sorry! Not our issue."
Also within those two weeks, a tornado touched down less than a mile away. We had baseball sized hail pummel the house and cause 30K in damages. Homeowners insurance covered it, but we still had to pay the hefty deductible and our rates went up.
Thanks for the feedback everyone!
I'm definitely well aware of having an e-fund for such instances. Unfortunately, when owing a home, you never know when you will blow through it. Like some of the pp stated, things come up unexpectedly that are out of your control all of the time.
I am more concerned about the month to month expenses. We bought our first house (the wrong one) 5 years ago and sold it 2, so I can't remember what we missed the 1st time around. I do remember being blinded by some of the extra expenses. We did have an HOA last time and my husband refuses to by in an area with an HOA again. The people on the board were so useless and they basically told you what you can and can not do on your own property...horrible...never again!
What I do regret the 1st time around is going with the 1st bank I knew about...not pricing around for a mortgage rate. This time we will be picky and take our time. We're in absolutely no rush.
Thanks again for the feedback...I appreciate it!
On sort of a different topic...
If that's the goal, you're in for a letdown. Buying a house is an emotional and sometimes financial roller coaster, and it's not possible for it to be entirely planned and surprise-free. You've gotta be ok with a certain degree of roll. That goes for how much money you've got available, as well as logistics. It helps to plan things, as much as you can, to give yourself breathing room and allow for a little chaos. Don't plan your lease to end within days of your closing.
Closing dates get moved around, details get re-negotiated... you'd think if you start early enough and stay on top of it enough everything should go exactly as you expect. But there are too many parties involved, and you can't bend them to your will. There are sellers, buyers, bank attorneys, loan officers, realtors on both sides, inspectors, appraisers, and the list goes on.
That's the single biggest thing I wish I knew. That it WILL change, that it will NOT be in my control, and the sooner you learn to be flexible and go with the flow, the less stressful and dramatic it'll be.
Thank you!
Thankfully, we are not in a lease with a landlord, so we can up and leave whenever. That was one of the reason we chose this place to rent.
Check to see what utility bills will cost you. You can usually call the electric/gas company that services the area to get info on the average usage for that property. It can vary a lot, depending on the age of the home, amount of insulation, age/efficiency of the furnace and other major systems.
We checked on utility usage for the gas and electric, but didn't check on water, and it was surprising how much the water/sewer bill is. The actual cost of water usage isn't so bad (other than in summer when the lawn needs watering), but there are so many fees/taxes added on to our bill that the actual water usage becomes a rather small percentage of our water/sewer bill. Even if we are very careful to conserve water, our bill doesn't change much.
Mr. Sammy Dog
The biggest surprise we had came 10 months after we bought our house. We had a 30 yr fixed mortgage that jumped up $200 a month because our property taxes were underestimated. Our mortgage company also suggested that we pay an extra $100 a month just in case this happens again. We declined.
Luckily we could afford the jump but none of the books I read mentioned that possibility.