1st Time Homebuyer - Realistic Time Horizon
Noobee
First I apologize in advance for crossposting, but I need as much
good advice as possible.
I'm a first-time possible homebuyer with about $5000 to my name, and
I want to know what's a realistic time horizon for me to close on a
new place?
Some background: My girlfriend (of many, many years) and I are
splitting-up. The place is hers, so I have to go. The split is
amicable, so she's giving me time to look for a place. By July it
will be a month, and while she's not pushing me out (she's actually
supportive of me taking a little extra time to buy a place), I
probably should beat it by August. I just got the idea to get a
condo last week, and I've found some places I'd like to buy (and
am reading "How To Buy a Home When You Can't Afford It" by Robert
Irwin - since there's no way in hell I can come up with the
10% down payment on the $100k - $105k condos or even the closing
costs - although I'm starting to check out some government programs
to help me with some of it - and I need all the help I can get); but
I'd like to know what's a realistic timeframe for me to shop around
for a really good mortgage ('cos I'll be eating nothing but baloney,
spaghetti, and ceral and going out 1 night a month if I have to pay too
much on the payments) and close on a place? Is getting out of my place
and into my new place by August (without getting totally screwed on
everything) realistic, or should I just stop the madness and go back
to looking at places to rent?
If the answer is "Yes, that's realistic", can anyone point me in the
direction of how to keep my closings costs down. I've got about
$4k to my name (and I, honestly, don't want to spend any of it and
save it for a stormy day), so I can't exactly pay $8k for lawyers,
inspectors, etc. Irwin's book, while helpful with mortgages, condo
agreements, etc., doesn't spend enough time (at least to my
satisfaction) covering all that external stuff that goes into the
closing costs.
Liz
"Noobee" <jona_...@yahoo.com> wrote in message
news:3EFB81BC...@yahoo.com...
> I'm a first-time possible homebuyer with about $5000 to my name, and
<snip>
> direction of how to keep my closings costs down. I've got about
> $4k to my name
if you keep losing $1,000 just in the time it takes to post, you won't be
buying anything at all !
others may have some creative suggestions but it sounds to me like you
better look for a rental for the time being ... or get kissy-kissy with the
girlfriend again real soon ...
if you want to know the real skivvy on closing costs, see if you can find a
mortgage broker who might be willing to provide you with copy of a
settlement statement for a property similar to what you might be purchasing
... be sure to indicate that you want to do business with her when the time
comes
Una
>My girlfriend (of many, many years) and I are splitting-up.
>she's actually supportive of me taking a little extra time to buy
>a place
Run (do not walk, run!) away from your X. Even if you could
get a 100% mortgage, you cannot afford the financial risk
involved in buying a house. If you get sick or lose your job,
you would lose the house too. And if the housing market goes
down like a lot of people think it will, the house will be
worth less than your mortgage, and you'll get stuck with the
difference in debt.
Una
Al Klein
posted in misc.invest.real-estate:
Realistic time frame? Three months, if you need a mortgage. The
rates just went down yesterday, so everyone and his monkey is
refinancing.
Realistic closing costs on a $100,000 purchase? More than the $5,000
you have. Walk into the office of any lawyer who advertises that he
does RE closings, and ask what he gets for a $100,000 condo deal.
Start reading - not books, the web is free. If you can pull off a
lease/option a week for a few weeks, you can move in August. (I don't
do creative financing, but I'm sure others, here and on web site
bulletin boards, can tell you how to move into a house for $500 total
cost.) Search for lease + option, "creative financing", "real estate
investing", etc. There's a billion dollars worth of education out
there.
And you might just decide that making money investing in real estate
is better than slaving in an office for someone else's benefit.
Noal McDonald
> If the answer is "Yes, that's realistic", can anyone point me in the
> direction of how to keep my closings costs down.
It's quite easy. There's no law that says that *you* have to pay the
closing costs.
When you make an offer on a house, have the seller pay the lion's
share of the closing costs. Since offering 3% less than asking price
is standard, esp. when no other offers are pending, you can always
offer asking price, but have them kick in that 3% (you'll want to do
the math for an exact dollar amount) for the buyer's closing costs.
Obviously, you can offer them more then asking, but you'll want to be
sure that the house will appraise for close to that.
Keep in mind, there are a few things that you will have to pay for up
front. Inspections (~$250-350 for basic. More for well, water, &
septic (if you're not on city water), wood pest, radon, etc.),
Homeowner's Insurance policy, Earnest money (your deposit, usually
~$1000, which is applied to closing costs. Anything not used then will
be refunded.) are the big ones. Expect to use about $2000 total in
upfront costs.
As for continuing to rent, with the interest rates as low as they are,
I don't see how anyone can justify that. Speculation on future
property values are on par with the speculation of the future price of
individual stock prices. Some go up and some go down. On the other
hand, I can tell you what kind of return on investment your rent is
going to get you....exactly zip.
Shop around for a broker and see what kind of deal you can make. Just
remember, verbal contracts are worth the paper it's written on. Get
any promises in writing.
Hope this helps.
Regards,
Noal
Al Klein
<bairds...@yahoo.com> posted in misc.invest.real-estate:
>Zero risk when you rent. The average home owner is making the worst
>investment of their life, yet thinking it was the best. If you stay in the
>house for 20-30 years it's worth it but it takes 5-7 years to just break
>even versus renting and most people only stay 5-7 years. It amazes me that
>people don't even use the rent vs buy calculators all over the net. They
>don't want to know. Granted there's plenty of emotional reasons to own, but
>the intellectual reason just doesn't pan out. But as any good sales person
>knows, buyers make decisions based on emotions then look for intellectual
>reasons to back up their emotional decision. That's where the "good
>investment" myth comes in.
No, real estate is a good investment. Buying a house to live in for 5
years isn't an investment. That's where the myth of owning a house
for 5 years being a good investment comes from.
D. Gerasimatos
Baird Spalding <bairds...@yahoo.com> wrote:
>
>I statisics say buyers stay in the house for for an average of 5 years, then
>buying a home is a bad investment for the majority of the people.
Average is 7 years.
Dimitri
Al Klein
<bairds...@yahoo.com> posted in misc.invest.real-estate:
>On 28-Jun-2003, Al Klein <A...@RealEstate-NY.biz> wrote:
>> No, real estate is a good investment. Buying a house to live in for 5
>> years isn't an investment. That's where the myth of owning a house
>> for 5 years being a good investment comes from.
>I statisics say buyers stay in the house for for an average of 5 years, then
>buying a home is a bad investment for the majority of the people.
Since most people don't buy a home as an investment, but as a place in
which to live, so what? You've proved something, but I'm not sure
what. Groceries aren't a good investment for most people, but most
people don't buy groceries as an investment. Does this mean that
supermarkets should stop buying groceries?
Al Klein
<bairds...@yahoo.com> posted in misc.invest.real-estate:
>On 29-Jun-2003, Al Klein <A...@RealEstate-NY.biz> wrote:
>> Since most people don't buy a home as an investment, but as a place in
>> which to live, so what? You've proved something, but I'm not sure
>> what. Groceries aren't a good investment for most people, but most
>> people don't buy groceries as an investment. Does this mean that
>> supermarkets should stop buying groceries?
>You can't rent groceries.
People who buy homes to live in aren't renting them. Where are you
going with this?