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Yes!!! Got Approved For A Home Loan

Actually frank is correct. If you have no buyer's agent, you can negotiate away the customary 3% buyer's side commission. You MUST get it in writing and demand to see BOTH SIDES of the HUD to be sure the listing agent doesn't take both sides of the commission. A good idea to speak with the title officer and have them warrant the listing agent isn't getting both sides.

There's inherent risk if you don't know what you're doing because you are unrepresented and no licensed agent has any fiduciary duty to you.

If you feel you're qualified to go it alone, you can save the money... but you must be fairly methodical in the negotiation.

Anyone on this site can feel free to hit me up for advice any time.

The buyer pays no fee. No 3%. So I don't know what you're talking about?

The seller pays the full 6%. 3% goes to the selling agent's side, 3% goes to the buying agent's side. But in no way does that affect the homebuyer and what he or she is paying.
 
The buyer pays no fee. No 3%. So I don't know what you're talking about?

The seller pays the full 6%. 3% goes to the selling agent's side, 3% goes to the buying agent's side. But in no way does that affect the homebuyer and what he or she is paying.

Damn... I have mad respect for educators.

I will get back to this when I feel like it.
 
Damn... I have mad respect for educators.

I will get back to this when I feel like it.

The price is determined by the seller, or there's no sale. And determined by the buyer as well, or there's no purchase. The seller's agent always argues that he's worth the commission because he will get a better price for the seller, and the buyer's agent claims he will get a better price for the buyer. No agent scenario, like Frank said, means both buyer and seller expect to "save" the commission. If they both know what they're doing, the sale price should be 6% less. lol.
 
So, anyway, Frank, I agree with you because I know you know what you're doing. The Doc resents being dissed when he's offering good help. Really, that is the same thing as telling the newb not to get an agent, isn't it?

Stoked should talk to several real estate agents and see what they're saying. It's perfectly true that a good RE agent will earn his pay working for you and save you some money. Lots of detail stuff a newb just isn't going to get all right.

Doc is wrong about one thing. Stoked is the buyer and doesn't have to offer as much as the seller is asking, so he just doesn't really need to pay what he's asked, even if some seller "sees him coming" and tries to score the RE commission cut. I'm not in the market to buy right now partly because I need to resolve some hanging issues before moving on to new ones, but partly because I believe there's a general selloff pending in our RE bubble generally, to bring prices in line with people's incomes. The "bailout" is still going on. . . banks getting soft money from the fiat press to loan out, interest rates being hammered to nothing. But Cedar City and St. George are a sweet spot a lot of people still want to land in, people with money from CA and LDS retirees from everywhere. . .

If Stoked has the down and the loan, he should be buying his home. I would suggest a conservative loan like a 15-year. He'll do OK if he learns what he can from Peeks and a few RE agents, and a lot of knowitall blowhards like me, as long as he lets Peeks be the one to cut out the commish.

Nah, we were just laying it on thick.

You are correct about getting a great RE agent who will work her/his *** off for you (if you choose that route). They are out there.


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Stoked, use PKM to your advantage. Start reading up on REPC. Get the state standard and read it 10 times to get familiar with it. You'll probably end up reading several real ones twice that many times anyway so you might as well get familiar,, and comfortable. If you choose not to use an agent then email a filled out contract to Peek before offering it.


As far as building inspections go: If possible, don't purchase a home older than the late 90's, and try to avoid them even. The things about buying a used home are roof, furnace, ac, sprinklers, and plumbing. Use these as negotiating points. Sellers know it will eventually be an issue for them so it's easier to get concessions rather than simply pushing, say, 10k off the price. Low balling gets under people's skin. Saying the roof needs to be repaired or replaced sounds practical.

HVAC is always going to have problems, but don't be dumb enough to think that requires a complete replacement like so many people do. A repaired unit is most times as good as new. If it's a newer home it should have pretty good energy efficient units. I would request the sellers have a service company come out and perform annual maintenance. TBH that probably won't get you much as normally it's nothing more than an advertising piece. Servicing HV/AC is not that difficult. However, if there are large issues the technician should be able to point them out. It's a small cost that the sellers will probably be willing to pay.

The roof is another matter entirely. It will eventually need to be replaced. You can keep it in good repair for 10 years or so past the year rating, but eventually it will have to be replaced. Let the building inspector look at it but also check it thoroughly yourself. The first thing you should do after purchasing is make damn well sure every shingle on it is fastened down firmly. It takes time but is not hard work at all. If I weren't a lazy *** I would do this every fall.

As far as plumbing goes, hope for good luck. Fixtures are cheap but the work can become a complete pain in the ***. I would replace all bathtubs valves immediately. They're cheap. A leaky valve will cost you several grand in repair.
 
So I rcently submitted the paperwork to see where I stood for a home loan and they told me that they could approve me for 160k right now. But if I wait and if I continue doing what I am doing they can approve 200k in the spring. I have never bought a home before, or any property for that matter. I am super relieved that my last two years of hard work and smart spending is paying off.

But since I am new to this do any of my more experienced forum members have any tips, warnings or recommendations?

I haven't read through the thread so I don't know what else has been said, but here are a couple of bits of advice for you based on my three experiences with buying a house:

1) Don't borrow as much as they are willing to lend you. Make up your mind first about how much of a monthly payment you can afford, then borrow no more than the amount that corresponds to that monthly payment. (By the way, get a good financial calculator or financial calculator app so you can run these calculations yourself instead of relying on others to calculate your monthly payment for a given interest rate and loan length.) In our case when we moved to Utah we could have borrowed about $100,000 more than we actually felt comfortable borrowing. But we would have been screwed if we had done so.

2) Get a 30 year fixed rate mortgage. That way as your income increases throughout the years you'll have more and more breathing room.

3) As your income increases and you can afford a larger monthly payment, convert your 30 year mortgage into a 15 year mortgage. You'll get a lower interest rate and that combined with the shorter term will save you a ton on interest.

4) Look for a good deal on a house, especially your first house, even if it means you need to fix some things up yourself. This becomes especially important if/when you need to sell the house. If you got a good deal, you'll be able to sell at a profit. If you didn't, the value of the house may well have gone down, forcing you to sell at a loss. The ramifications of selling at a profit vs at a loss depending on the deal you got and the overall market swings are something that I myself didn't fully grasp when we purchased our first house. We got lucky--our first real estate agent really knew what she was doing, and told us "You HAVE to buy this house, this is a killer price" when we were still a little undecided because it wasn't in a great area and needed some work (bathrooms & kitchen were in rough shape). But she was right, it in fact WAS a killer deal, which really helped us out when we needed to sell 2.5 years later.

5) To use an agent or not, that is the question. We have used an agent, for all three of our house purchases. But we've had mixed experiences. Our first agent, the one I just mentioned, was amazing. Definitely earned her commission and then some. Our second agent, conversely, literally did nothing for us, we could have easily done as well on our own. Our third agent was in between... maybe helped a bit, but didn't really help out in the negotiations like our first agent did. In fact, we felt like we overpaid for our third house by quite a bit. For your first purchase you should probably use an agent, because there are so many things that can go wrong. But make sure you get a great agent!!! Ask around to find out which of your family/friends in the area feel like they had a great agent, and don't accept anything less.
 
On top of the"buy what you can afford, not what you qualify for" advice:
Take your total mortgage payment and send in an extra 10% every month (if you can afford it). This will be applied to the principal loan amount. Over the course of your loan, you'll save thousands in interest. Plus, eventually, you'll get to the point where you are a month ahead, then two months ahead, etc. That could come in handy in an economical emergency.
Also, when you close on your loan, you usually don't have to make your first payment until AFTER your first month (you get to "skip" a month). Make that payment anyway. You'll instantly be one month ahead.
 
To Dave, and David Ramsey ^ ^^

Being financially prudent does not always involve not taking risks or considering environment and situation. The "live within your means" line when discussing a home purchase is possibly the worst financial advice you can give anyone. I've personally seen this several times. Buying more than you are comfortable with now can turn into one of the best investments you will ever make exactly for the reasons Colton mentioned above.

Also, with these low interest rates, never pay a dime extra unless you are planning on upgrading down the road and will need to stretch yourself further.
 
Being financially prudent does not always involve not taking risks or considering environment and situation. The "live within your means" line when discussing a home purchase is possibly the worst financial advice you can give anyone. I've personally seen this several times. Buying more than you are comfortable with now can turn into one of the best investments you will ever make exactly for the reasons Colton mentioned above.

Actually, my advice was to NOT buy more than you are comfortable with, so I'm not sure what part of my post you're referring to.
 
To Dave, and David Ramsey ^ ^^

Being financially prudent does not always involve not taking risks or considering environment and situation. The "live within your means" line when discussing a home purchase is possibly the worst financial advice you can give anyone. I've personally seen this several times. Buying more than you are comfortable with now can turn into one of the best investments you will ever make exactly for the reasons Colton mentioned above.

Also, with these low interest rates, never pay a dime extra unless you are planning on upgrading down the road and will need to stretch yourself further.

Conversely, there are thousands upon thousands upon thousands of people out there who lived beyond their means and once something came up (extra expenses because of an additional child, job loss, divorce, etc.), the mortgage prices couldn't be made and the house had to be sold, even at a loss. Or worse. Hence all the foreclosures, pre-forcelosures and short sales in the last decade.

Your advice, franklin, imo is irresponsible.

Nothing is just that simple.

That said, my wife and I are following your train of thought and are currently looking at houses whose mortgage payments after 20% down would be 42.7% of our net monthly income. We'd really be stretched thin for a couple years but our jobs are as safe as you get and our annual raises combined will up our total income by about 8-12% annually so we should be fine in 3-4 years. Plus we'd have a good amount handy in case we fell behind or something. And like you said, I look at it as investment. This house could very well be worth 2-3 times its' current asking price in 20 years or so when we retire years so that's huge.

So yeah, there's a lot to consider. A LOT.

P.S.--Regarding what Colton said in #3, yes, get a 30 year mortgage. But do not convert it to a 15 year when you get the chance. There's no need to pay the 3-4K in closing costs on a re-fi let alone tie yourself down to paying an extra 300-600 (give or take) a month if you don't have to. If you want to pay the house off quicker and cut back on pissing money down the drain on interest, just do what BigB said and pay off extra principle each month or whenever. Making one extra mortgage payment a year knocks eight years off a 30 year mortgage. So do the math. There's a ton of sites out there. If you feel comfortable and have a ton of cash liquid and maybe don't feel comfortable or knowledgable investing in the market, pay extra principle off your mortgage. Do that every so often and you could maybe turn that 30 year mortgage into a 10-15 year one. But this route at least gives you the flexibility. Re-fi'ing does not.
 
Conversely, there are thousands upon thousands upon thousands of people out there who lived beyond their means and once something came up (extra expenses because of an additional child, job loss, divorce, etc.), the mortgage prices couldn't be made and the house had to be sold, even at a loss. Or worse. Hence all the foreclosures, pre-forcelosures and short sales in the last decade.

Your advice, franklin, imo is irresponsible.

Nothing is just that simple.

That said, my wife and I are following your train of thought and are currently looking at houses whose mortgage payments after 20% down would be 42.7% of our net monthly income. We'd really be stretched thin for a couple years but our jobs are as safe as you get and our annual raises combined will up our total income by about 8-12% annually so we should be fine in 3-4 years. Plus we'd have a good amount handy in case we fell behind or something. And like you said, I look at it as investment. This house could very well be worth 2-3 times its' current asking price in 20 years or so when we retire years so that's huge.

So yeah, there's a lot to consider. A LOT.

P.S.--Regarding what Colton said in #3, yes, get a 30 year mortgage. But do not convert it to a 15 year when you get the chance. There's no need to pay the 3-4K in closing costs on a re-fi let alone tie yourself down to paying an extra 300-600 (give or take) a month if you don't have to. If you want to pay the house off quicker and cut back on pissing money down the drain on interest, just do what BigB said and pay off extra principle each month or whenever. Making one extra mortgage payment a year knocks eight years off a 30 year mortgage. So do the math. There's a ton of sites out there. If you feel comfortable and have a ton of cash liquid and maybe don't feel comfortable or knowledgable investing in the market, pay extra principle off your mortgage. Do that every so often and you could maybe turn that 30 year mortgage into a 10-15 year one. But this route at least gives you the flexibility. Re-fi'ing does not.


Exactly this. Consider the audience as I'm mainly speaking to Stoked and the rest on this forum who don't come off as a half-witted morons.

Maybe it's different in your neck of the woods, but the thing is a lot of people around here buy starter homes and waste tons of money and equity gain in the process. It's such a trash model and typical of our current throw away society. If you want to upgrade then why not purchase what you want now instead of in 10 years? Everything you put into a house is going to be wasted money when you sell to upgrade your starter home. Your shed, deck, counter tops, landscaping, cabinets playground, etc, etc. To make it worse, then you go to purchase that dream home you could have purchased for $160k 10 years ago and now it's $320k.


Put ten or twenty grand cushion in the bank and spend an extra $50,000 or $100,000 or whatever and purchase everything you dream of. That will get you a helluva lot more around here (average is about $220k so you could be getting roughly 50% more). Your cushion will also pay for that extra $3-4 hundo per month house payment for several years if necessary. If things get bad and you start running below your comfort zone then get a second job during the holidays to cover for another year or two. If it keeps going south then work weekends at a gas station until your income catches up.

The money you will make or save off taking such a risk is pretty significant. Again, I'm talking to someone like Stoked who IIRC is about my age, and people younger, who aren't morons.
 
BTW, thanks for the thread Stoked. Maybe we prattle on with a lot of tangential nonsense but hearing about everyone's life is the essence that makes for the best threads and reason to come around here.

Personally, I want CL to finally drink that handle and post videos.
 
I'm different than most home buyers, as I look for the homes that need a lot of work when I am buying. I want to replace the entire water system and bring electrical up to code. Heck, I'm even ok doing the roof. I do make sure to have a new hvac though. I don't want to mess with the old garbage they used to put in.

If you are semi capable and willing to do a little bit of work, you can replace the entire plumbing system in most homes yourself for around $1500. If you don't k ow how to fix it, call me and I will explain what you need and how to do it.

For electrical, spend $20 on a wiring book and $100 on tools and learn how to update things. If you need a new panel, find a trustworthy electrician to come in, you can usually have that installed for less than $1000.

I am with Franklin om buying the upper limit of what you can afford. We bought the very most of what we could qualify for on our last home and just sold it and made $70 k on it after some repairs to update it

Like I said though I do all the work myself and don't spend any unnecessary money on the purchase price.
 
I'm different than most home buyers, as I look for the homes that need a lot of work when I am buying. I want to replace the entire water system and bring electrical up to code. Heck, I'm even ok doing the roof. I do make sure to have a new hvac though. I don't want to mess with the old garbage they used to put in.

If you are semi capable and willing to do a little bit of work, you can replace the entire plumbing system in most homes yourself for around $1500. If you don't k ow how to fix it, call me and I will explain what you need and how to do it.

For electrical, spend $20 on a wiring book and $100 on tools and learn how to update things. If you need a new panel, find a trustworthy electrician to come in, you can usually have that installed for less than $1000.

I am with Franklin om buying the upper limit of what you can afford. We bought the very most of what we could qualify for on our last home and just sold it and made $70 k on it after some repairs to update it

Like I said though I do all the work myself and don't spend any unnecessary money on the purchase price.


There are ZERO trustworthy electricians in Jazzlandia.
 
P.S.--Regarding what Colton said in #3, yes, get a 30 year mortgage. But do not convert it to a 15 year when you get the chance. There's no need to pay the 3-4K in closing costs on a re-fi let alone tie yourself down to paying an extra 300-600 (give or take) a month if you don't have to. If you want to pay the house off quicker and cut back on pissing money down the drain on interest, just do what BigB said and pay off extra principle each month or whenever. Making one extra mortgage payment a year knocks eight years off a 30 year mortgage. So do the math. There's a ton of sites out there. If you feel comfortable and have a ton of cash liquid and maybe don't feel comfortable or knowledgable investing in the market, pay extra principle off your mortgage. Do that every so often and you could maybe turn that 30 year mortgage into a 10-15 year one. But this route at least gives you the flexibility. Re-fi'ing does not.

I guess I should have clarified that it depends on the situation. With us, the lower interest rate of the 15 year mortgage more than offset the closing costs involved with the refi. But that will depend on the details of the interest rates at the time you consider refinancing, so there will certainly be situations where your advice to just pay extra would be the better thing to do.
 
Everything you put into a house is going to be wasted money when you sell to upgrade your starter home. Your shed, deck, counter tops, landscaping, cabinets playground, etc, etc.

That's not necessarily correct. With some research you can put money into things that WILL later add to the sales price. In my case we redid the kitchen and two bathrooms, and the money we put into that was more than made up for in the increased sales price. Much more.
 
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