Twenty Things to Do Before We Buy a House

I’ve spent lots of time thinking about selling our home here and moving to another state. The market is worse here than almost anywhere else in the country (we also boast having the highest foreclosure rate – don’t be jealous!), so it doesn’t look like it’s happening anytime too soon.

Still, it’s good to have a plan, and I have plenty of time to come up with one.

When Husband and I are finally ready to start looking for a house in our new home state there are a few things we will be sure to do, some of which we didn’t do in out first home buying process.

Before We Start Looking

These are things we will do before we actually go see any houses.

1. Familiarize ourselves with the area. We are still debating on whether or not to rent for at least six months first. I know it’s a good idea, but the thought of moving and doing it all again six months or a year later is so unsavory. On the other hand, it would give us time to really know the area, and not have to rely on the recommendations of friends and family whose preferences may not be the same as ours.

2. Know our credit score. We’ll be making sure our credit reports are accurate. We’re not planning on getting pre-approvals, as we don’t want anyone pulling our credit (and thus lowering our credit score) until we’ve chosen a lender. By knowing our score and income, and given our complete lack of debt at that point (our only debt is the mortgage on our house here), we can get a good idea of what interest rate we will realistically qualify for, and what kind of mortgages are available to us.

3. Know how much house we want to buy. We are huge proponents of living below our means, and just because a lender is willing to lend us $300,000 doesn’t mean that’s how much we want to borrow. Our goal is to take the equity (falling every day) we have in our current house and try to keep our mortgage payments about the same as they are now. Our mortgage is currently 12% of Husband’s income, but we know we’ll be taking a pretty big salary cut when we move. We’d like to keep the mortgage at 25% of his income or less. We won’t know our exact numbers until we sell this house and Husband gets a new job.

4. Compile a list of requirements. Our list is broken down into Must Have, Preferred and Wishes. We Must Have at least 3 bedrooms, but a 4th is Preferred. A Den or other Bonus room is one of our Wishes. So is having a laundry room on the second floor. You get the idea.

5. Hire a buyers agent. This is one of the most important things we’ll do this time that we didn’t do last time. There are seller’s agents, buyer’s agents and dual agents (represent both sellers and buyers). When buying a home I’m going to have a buyer’s agent. A buyer’s agent is ethically required to do what’s in our best interest in the real estate transaction. They represent us and only us, and cannot be in collusion with the seller and/or his or her agent. We won’t be afraid to sign a non-exclusive contract, but we’ll be sure to read and understand it first. An experienced buyer’s agent is going to understand the market, know where the bargains are and know how to whittle 1000 possible listings down to the five to ten that most meet our requirements. They won’t try to push their own listings on us; no trying to fit a square peg into a round hole. That will save us tons of time, tons of money, and tons of stress.

6. Do our own research. We’ll look on the internet for information about the neighborhood, schools, crime. Sites like Homefair are chock full of useful information. We’ll also check the property appraisers website to get an idea of property taxes in the area we’re looking. Some areas (like the one in which we live) give homestead exemptions and longevity discounts that can make the current owner’s taxes artificially low, so we’ll want to make sure we’re getting an accurate picture of the taxes we’ll have to pay.

7. Get insurance quotes. They won’t be accurate, but if we can get an agent to give us an idea of the rates for the area we’re considering and the types of policies we’ll need (i.e. is it a special flood hazard area, necessitating flood insurance?) we can use the information as a factor in our decision.

Items to Bring When Looking At Houses

1. A Scorecard. We’ll use our Required/Preferred/Wish lists to make a scorecard for each house to help us keep track of the houses we’ve seen and for comparison purposes later.

2. A digital camera, an extra data card and extra batteries. We’ll take pictures of the neighborhood, the outside, views from the front and back doors, interior features we like, interior features we don’t like.

3. A cell phone charger. We can use this small electrical appliance to test electrical outlets. Oh, yes.

4. A tape measure. Will our furniture fit? How much wall space is there? How big of a refrigerator can I buy for the space? All good things to know.

5. Bottled Water. I don’t want to waste time having to stop for drinks.

6. Hand Sanitizer. I’m allergic to cats. And if a house looks dirty I’ll definitely want to use some. Blech.

Before We Put An Offer In

We hope to narrow it down to three houses, depending on the market and what’s going on with it. In some cases we may do these things after we put in the offer, but only if we have sufficient “outs” built into the contract.

1. Visit the neighborhood at different times of day. A neighborhood that seems quiet at 11am might transform into a noisy, motorcycle club and roving-teen-filled mecca at night. We’ll check out the neighborhood at random times of day -and week – to make sure it fits with our preferences. Another thing we’ll do is look for all of the ways to access the neighborhood so we can see the surrounding areas and any potential problem areas.

2. Talk to our prospective neighbors. We’ll go up and knock on the door. It’s not a time to be shy. These people will be living next to us for many years to come, and if they open the door and clouds of marijuana pour out we may want to reconsider our choice. You may not. Different strokes. We’ll ask about crime, difficult neighbors, renters, worrisome animals (a friend lives next door to a menagerie of very stinky, more-comfortable-on-a-farm-than-in-a-subdivision-type animals). What do they like best about the neighborhood? Worst?

3. Do more of our own research. We’ll check out the property appraiser’s website to get information about taxes and home sale prices. We can find out how many times the house has changed hands and how much was paid, and lots of other useful information that’s all available for free. Knowing how much someone paid for a home can be extremely useful when negotiating price.

4. Check with the city to see if there are any pending land use changes. A good friend bought a large home on a very nice piece of land, only to have a huge chunk taken away under eminent domain for a sewage system. The pending plan would have been useful to know before buying, methinks. The forty acres of woods behind our dream home could wind up being razed to make way for a WalMart. Zone changes happen, but we at least can protect ourselves as much as possible.

5. Check to make sure any renovations have received the proper permits and inspections. I know several people who were fined and/or had to rip out renovations, wiring and plumbing that were done without proper permits and were not up to code. If the homeowner can’t provide proof we’ll contact the city. If not permits were obtained that will affect our offer.

6. Check to see if there is a Homeowners Association. If there are, what are the fees? What services are provided for the fees? We’ll get a copy of the community rules, and decide if we can live with them. Is participation compulsory? My sister’s community has several homeowners refusing to pay their share, and the last treasurer embezzled funds. Oy.

7. Bring in the expert. Before I bought my current house I brought my stepmother (the most critical person I know) and my best friend (the most observant person I know) to get their opinions. It was my first house and I was nervous about taking such a big step. Next time we’ll bring a friend who is a building contractor to see the house, just to get an opinion on the construction and any issues we might have that way.

I hope there’s time to do all of these things. The market and other factors will dictate if we’ll get to each step, but I hope we do. Once the offer is accepted and we have a deal we’ll of course have lots more to do, which will be the subject of another post.

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13 Responses to “Twenty Things to Do Before We Buy a House”

  1. Carnival of Personal Finance # 145: Baby Education Edition | Million Dollar Journey Says:

    […] BeThisWay from Are You Going To Be This Way the Rest of the Time I Know You? presents Twenty Things to Do Before We Buy a House.  Interested in buying a house?  This article will help you prepare for the big […]

  2. Carnival of Personal Finance #145 : Carnival of Personal Finance Says:

    […] Twenty Things to Do Before We Buy a House […]

  3. alison Says:

    If you want to check outlets, I’d recommend buying an outlet tester. It’s small and will tell you what you want to know.

    Another good thing to know about the neighborhood is if it’s mostly owners or renters. Ours is the later and it makes it hard to really get a feel for the neighborhood because it’s constantly changing. You could move in, have fabulous neighbors and then a few months down the road that could all change.

  4. Lisa Says:

    When you hire a buyer’s agent, it’s always a good idea to ask them questions. How long have they been a realtor? How long have they worked in the area? They won’t be too much help to you if they’ve only been there six months longer than you have!

    When looking at houses, you’ll want a pen and paper — or ideally, print outs of the listings you’re seeing. (If your agent is a good one, s/he’ll provide these.) Digital cameras are great to have but they don’t capture things like, “This house smells like cat pee.” or “Stairs sounded like they were about to collapse under me.”

    You might want to re-think getting pre-approved for a mortgage. Some sellers want to see that you’re preapproved before they’ll seriously talk offers with you. Coming to the table as a preapproved buyer just puts you in a better position to negotiate, because they know they won’t go through the rigmarole just to have you be rejected.

    As you know, I’m doing the “rent first, buy later” approach to house hunting in our new area. I do agree, it’s a giant pain in the butt, but I wouldn’t do it any differently. We have the luxury of time on our side – there is no rush to have to buy. And we have the luxury of our money in the bank and no contingency to sell a house before we buy another one. That’s so huge, and powerful. It may be a buyer’s market in a lot of areas, but that doesn’t mean you still don’t want to be as attractive a buyer as you can be, with as much leverage as possible.

  5. Lynda Says:

    I’d include a golf ball in the Items to Bring section. The ball helps you check that water flows towards drains rather than away from them!

    Oh yeah, and, don’t forget that houses with animals may have left a few fleas behind and they’ll go straight for the first warm, moving object. (Yes, that was my experience, how did you guess?)

  6. Monday Morning Link Time « Are You Going To Be This Way The Rest of The Time I Know You? Says:

    […] I’m thrilled that my post Twenty Things to Do Before We Buy a House was chosen as an Editor’s Pick in the Carnival of Personal Finance: The Baby Education […]

  7. Funny about Money Says:

    What an excellent list of ideas. I especially like the idea of bringing a camera. I have a digital recorder that has a small (not great, but adequate) camera built in. So you can make a few “notes” into the recorder and then take pictures of what you’re talking about.

    Did you know you can ask the police about crime statistics in an area? Call the local precinct. Also, in our part of the country the power company will tell you the average power bill over several months. Here, the summer is the operative period; if you’re moving to a cold climate, you might want to know what the winter heating bills were.

    Another thing we discovered is to be sure you visit the neighborhood at many different times of the day and also on the weekend. If you came by house in the middle of a weekday, you wouldn’t hear Biker Boob’s unmuffled Harley, and you wouldn’t get to see the cars parked all over the front yard of the rental house shared by five adult men. Take a walk through the park late on any evening and you’ll enjoy the 11:00 p.m. Cop Helicopter buzzover. In the daytime during the week, the area looks pretty normal. Surpriiiise!

    One other strategy: I no longer take a home inspector’s word for anything. After the last adventure in home buying, I now hire my own plumber, roofer, air-conditioning dude, and electrician to inspect any house I’m serious about buying. It’s worth a few extra bucks to get the straight story from guys who don’t depend on referrals from real estate agents for their next jobs.

  8. Self Storage Part 1 - When Paying to Store Your Stuff Is a Good Idea « Are You Going To Be This Way The Rest of The Time I Know You? Says:

    […] If you are relocating. If your house won’t be ready when you get there, or if you want to rent first to get a feel for the area before committing to buying a home, renting a smaller, less expensive apartment and storing all but the necessities can help you save […]

  9. Carnival of Personal Finance # 145: Baby Education Edition | 8ZU Says:

    […] BeThisWay from Are You Going To Be This Way the Rest of the Time I Know You? presents Twenty Things to Do Before We Buy a House.  Interested in buying a house?  This article will help you prepare for the big […]

  10. Michele Says:

    What a great post. I’m a Realtor in Arizona and I wish everyone did half as much research and thinking as you do. Many people who consider themselves frugal don’t hire a buyer’s representative and I will never understand that logic. Not hiring a buyer’s agent or hiring the wrong buyer’s agent can actually cost you thousands and thousands of dollars. Those who are truly frugal, like yourself, understand this. Happy house hunting!

    One other tip, though. Someone posted that they would not trust a home inspector. Again, it comes down to hiring the right professional. As a Realtor, I rely on my past clients for referrals to build my business. I would never recommend an inspector who overlooked issues, as I know the impact that would have on my business after the clients moved in. Top professionals tend to gravitate towards one another. Look for them.

  11. Well, we’re finally moving… « Are You Going To Be This Way The Rest of The Time I Know You? Says:

    […] March 8, 2009 — BeThisWay I know I’ve written a time or two or thirty about our desire to move out of our too-small townhouse and buy a home in Georgia or  North […]

  12. albert villalpando Says:

    THIS WAS VERY HELPFULL I AM 25 YEARS OLD AND VERY MUCH WANT TO PUT MY CHILDREN IN A AFFORDABLE NICE 4 BEDROOM HOME..IS THERE ANY THING ELSE I MUST KNOW ABOUT BUYING A HOME I AM VERY NERVOUS ABOUT THIS HUGE STEP

  13. Dan Says:

    pay for an inspection of you are really interested….do make of fool of yourself by checking outlets for power


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