Naive fantasies or possible reality?

[okiron]

I've been thinking. And I do that a lot. I'm planning on moving to Sacramento from Huntington Beach, California in March-ish. That part of the plan is a sure thing.

Well..after more thinking, I begin to realize how much money I would be saving if I stopped moving around the country every 6 months and actually settled down somewhere. More travelling, less moving. Especially with how fast our family is growing, moving is becoming more of a chore rather than a pack up and go kinda thing.

I'm only 20 (21 on Wednesday!!!) and as much as I've gone through in this world, I'm still naive and ignorant about a lot of things. I have good credit. I pay my bills on time and pay more than the minimum. I have a decent income that could be bigger if I just asked for it. But anyways, how realistic is it for me to be able to purchase my first home? Something small, 2 bedroom bungalow for $75k-ish. Or a repo-ed house that's being auctioned off. I'd be able to pay 3k-8k down payment. (That's 4-10%)

People keep telling me where ever I go to stop renting and buy a home. But I was wondering how realistic would it be for me to actually be able to do that. Hopefully some adults here could either slap me across the head and call me silly or encourage me to go with it. Either way, I'll end up more knowledgable than I started off with.

 

[Bo B Bunny]

You probably would have no problem getting financed and buying a home with your credit and if you have a good income.

It is a good investment and really awesome to be in control of your own living space - unless you live in a neighborhood/subdivision that has strict rules..... things like that.

Realistically, are you prepared for unforeseen repairs, and such? I don't know how renting goes in CA, but here, water is paid for you, and all outside services (lawn, painting, trash etc.,) is included..... you are responsible usually for heating, electric,cable, phone, and such. Someplaces offersome of those or all of those included in the rent, but it's very rare.

We've had a couple of flooding issues, but here are some of the things that have cost us a lot during the 14 years we've lived here. Some are upgrades that were needed, maintenance and others were repairs. Most of the repairs we've done on our own, but some were things we had to hire out. We live in a country home that was built back around 1963. It's been added to and remodled some before we even moved in. New homes still have problems and maintenance. The things that aren't bold are things we COULD have done without.. but really needed done for some reason or another.

• new wiring
• new toilet
• fix several leaks in pipes over the years
• 2 or 3 dryers - one caught fire
• 1 washer
• 1 fridge and added water line for ice maker
• 1 stove
• added dishwasher
• added ceiling fans
• painted interior 2 or 3 times - some rooms need done now
• new carpet (got old, sydney ate the corner, and a hole in the entry lol)
• warranty repair on furnace (what a mess that was! during a blizzard)
• flood took EVERYTHING in the basement - lost all stored items and furnace
• new sump pump x 2
• water heater x 2
• water softner
• added backup sump pump
• new central a/c
• cleaned A-coil when new central a/c wasn't working 2 years later (lucking out when we found the problem ourselves and could actually fix it! Most companies would have recommended replacing it.)
• New patio door
• paint wood siding
• pressure washed and resealed all the decks (we have several!)
• new septic lines and drywell
• replaced shrubs that died
• added some fence
• gravel in drive
• added new vent to room with electric heat that quit workingand no a/c duct.
• new roof
• reset mailbox due to post rotting
• replaced washer, dryer 3 x including one that caught fire!
• flooring in the foyer
• new thermostat
• new lighting, fan in bathroom
• replaced some part on the water pump (I actually crawled into the pit outside- under our deck, on the phone, took it off, got the new one, came home and put it on.... at the guidance of my out of town hubby on the phone! LOL)
• we are preparing to replace the pressure tank and move all of the water system into the basement.
• added storm door
• added insulation
• had raccoons removed from attic ($200 for coon urin spread around to get them to leave!!!)
• Raccoons ruined the freezer out in the garage (detached garage) when they opened it and we didn't find it for several days..... we smelled the rancid meat! in the heat of the summer around 90°
• Tree removal
• replaced window treatments (wooden blinds had been repaired once and were dying again!)
• cleaned heating and a/c vents throughout
• replaced entry closet door 2 times..... needs another one - it's a pain.

Of course we have a family of 4, many animals, I babysat for several years, and we have sheep, horses, and the kids track mud into the door, hubby works outside (heavy eqt. mechanic) alot and comes in dirty and is really hard on the floor too.

Anyhow, you wouldn't have as many issues, but it's things you don't expect. That's my only concern for you - and if you can handle those things - you can own a home!

 

[naturestee]

I'm 26, the hubby and I bought our first home together two years ago. 95K, 5K down payment, monthly mortgage with taxes and everything around $750. There are lots of mortgage calculators online, where you put in the price of the house, the down payment, and the interest rate and it tells you how much you'll pay per month. Also, look into first time homeowners stuff. I don't know what's available to you. In WI, if you're below a certain income level (which is actually well into middle class), you can get reduced interest rates.

You'll need to decide how much of a fixer-upper you can handle. We didn't want to do a lot of work on a house, so we got a smaller one than most on the market in our price range. But it's nice.

 

[Bo B Bunny]

I guess I could have said something like that...... LOL!

 

[slavetoabunny]

It's entirely possible for you to purchase a home, but not in California for the price you are looking for (as I'm sure you already know!). That is the primary reason my husband and I left and moved to Florida (we lived in Huntington Beach too). We were able to purchase a beautiful 1900 s.f. home on a lake here for $190M. The same home in Southern California would have cost close to $1MM in Cali.

I would start researching housing prices in area of the country where you would be willing to relocate to. It's still a buyers market and there are plenty of bargains to be found.

 

[Luvmyzoocrew]

Bo brought up some great points of the possible things that will have to be done in a new house that will be your responsibility , when you rent it is the landlord responsibility. Since we moved into our house, which will be one year in dec, we have put out a ton of money for things that needed to be done. The great thing with a house is that it is an investment that will hopefully return your money 10 fold in a few years (maybe not 10 fold,lol)

Here is what i think,if you pay your bills and your are paying extra, take a few months (at least) and put money away. I dont know if you have any savings, but if you dont take what you are paying extra on the bills , or if you have any extra and get a nice cushion started. If you already have a decent amount of money in the bank then you will have a nice cushion for yourself that if something major was to need to be done or happen then you will have the money to do it.



When looking for a house, i dont know if itis the same everywhere, but get a home inspection. This will tell you of possible things wrong with a house, so you will have an idea of if there is anything that you want done before you move in and what things you want to address after you move in. Other expenses to take into account is with a house you have property taxes, and home owners insurance that you have to pay for so take that into consideration when figureing out what your monthly payments will be.



good luck

 

[pamnock]

I think the best thing you can do is to extensively research your options so you can make an informed decision.

We currently own 3 homes. It'sa lot of work, and some days I just don't want the responsibility.

Remember that home repairs can be very expensive. It has helped immensely that we are able to do any type of home repair/renovation.

You're much better off buying a newer home if you are not a "handy-woman".

Taxes, insurance and maintenance can be very expensive, so be certain to figure these costs in.

I do like the advantage of being able to build equity in a home.

There are some excellent websites on owning vs renting including this one:

http://www.homeloanlearningcenter.com/YourFinances/OwningversesRenting.htm



Pam

 

[Leaf]

When I bought my first house I went through the USDA RHS and got a first time home buyers loan. I went Low Leverage with taxes and insurance included in the monthlyhouse payment.The house was a 4 bedroom 2 bath with a car and a half garage for $94,900 - My payments were $435 a month. No down payment, closing costs were $79. Upfront costs included a $250 house inspection, $45 termite inspection, $25 in paperwork processing fees... You can call your local Department of Agriculture about it.

 

[Bo B Bunny]

All very good advice! I concur with everything being said.

We have quite a bit of equity in our home now and we are getting it ready to be sold very soon. I want to move to a mini-farm. John wantsto move to a HUGE farm. LOL!

I told him if we get a big farm - I'll have room for more BUNNIES! He rolled his eyes. :X

 

[okiron]

Thank you everyone for your informative inputs.

Bo B Bunny - Actually, most of the apartments around me only pay for lawn care, once in a blue moon gas and water but that's very rare and what you could call maintainance, but when it takes 2 months to respond to a problem of any sorts, I don't count that as a luxury. It's easier to fix it yourself. At my apartments, it's all fix it yourself. But I do understand what you mean.

Naturestee - I've used the mortgage calculators online and $75k-ish is what I could afford and still have money to put aside for savings/emergency/misc. I guess it all depends on what exactly needs to be fixed up in the house. I'm willing to learn how to be handy on my own but there's some things that I'll want a professional to do.

Slavetoabunny - Actually there's a bunch of houses in Sacramento at that price range. It might not be the grandest houses but they're nice starter homes to give me the feel for things. And repo-ed houses go way cheaper than the usual market.

Theicequeen99121 - Yeah, understandably. If I do decide to go through this way (and that wont be decided till a LOT more research) I'll hold off my move in March to save up more money. Ooo yes, a home inspection is a must. I don't care if my house has problems, I just wanna know about it! Well...some problems I do care about

Pam - Yes, I have just begun my journey of research. I know nothing about owning a home or where to even get started on the process. I'm reading a lot of articles and asking EVERYONE for advice. If I'm ever being silly, do let me know

Leaf - Wow I'll look into it thanks! I also know a lot of cities offer a deal where if you buy a home in their city and stay there for so many years, they'll give you some money for the home. If you move before that time, you have to pay it back.

 

[okiron]

Another question. Especially because I live so far away and would have to plan all detailed home inspections within a day or 2 at a time when I could drive up there, would it be best to have an agent help me? Would a Remax agent show me the same homes as a Century 21 agent? How do I decide upon that?

Please don't mind me if I ask silly questions. Like I said, I'm ignorant on the subject and would love a good head slap if it's warranted.

 

[slavetoabunny]

Could the current owner of the property be there for the inspection? That is what we did when we had our Florida home inspected while we were in California. Just have the inspector set an appointment with the seller (or his agent).

Any realtor can sell a home listed with any other realtor. If you want to have a realtor (I didn't - no problems whatsoever), get some recommendations and find someone you trust.

 

[NZminilops]

I'd say that if you can, go for it! I really want to have my own house with my partner but at the prices around here, don't think it will ever be possible.

An average house price in the area is about NZ$350,000 or US$268,000. Downpayment would be about $10,000 then at current interest rates for a mortgage, we'd be paying like $400 a week for 30 years :X. Yes that's a week, not a month.

I'd so love to go over there and live and buy a house!

 

[AngelnSnuffy]

okiron wrote:

Another question. Especially because I live so far away and would have to plan all detailed home inspections within a day or 2 at a time when I could drive up there, would it be best to have an agent help me? Would a Remax agent show me the same homes as a Century 21 agent? How do I decide upon that?

Please don't mind me if I ask silly questions. Like I said, I'm ignorant on the subject and would love a good head slap if it's warranted.

IMO, it's best to use an agent. I can explain somewhat if you use an agent what happens (normally). This is in our area though, I don't know if it's the same everywhere.

Firstly, whatdo you mean by "all detailed home inspections"?:? When purchasing a home, if you use an agent, after an offer is accepted, the closing procedures begin, these include (these may vary by location): an appraisal, a termite inspection, a whole house inspection, sometimes a septic, furnaceinspection (for insurance purposes). The selling agent usuallysets up all the inspections also. You don't have to be present for the inspections, necessarily. The findings are mailed or faxed to the selling agent.

Yes, any agent can show you any property, given the agent you are using is from the same area of the house you want to see.Keypadsthat agents use to get into properties are run area by area, so an out of area agent couldn't use their keypad to get into the lockboxes out of their area (unless the lockbox is on a combo lockbox), at least that's how it is here. In that event, the listing agent of the home you want to see must let your agent in, if they're willing-they don't "have to". I'm not an agent, but I work at a real estate company.

If nothing else, just call up a company and ask to speak with an agent. I'm sure they'd be more than happy to answer any questions you have.

Does that help any? Make sense? I know it can all be confusing.

 

[okiron]

AngelsnSnuffy - All I meant was I can't just wait around for open houses and I'd need appointments to be able to see a bunch of homes at a time because I'm so far from the area. No actual inspections involving home owners and inspectors. Even if it's a sad old shack, I want to be able to see it in person and like it to buy it. I'll want to actually be able to see a bunch of houses in person but don't have the time or money to be going to open houses every weekend.

Edit : Well my aunt sent me very generous birthday and christmas checks so I decided to open a separate checking account just for the home owning plan. Any other birthday and christmas money is going into there. It's a small contribution compared to the actual mortgage but I'm more inclined to save because 1. it's separated from the rest of my finances 2. it's with a completely separate bank from the rest of my finances so no easy money transfers if I feel like spending.

 

[AngelnSnuffy]

Oh! You don't have to go to open houses. Actually, open houses don't really get all that much attention alot of times. You can call a realtor, give them the credentials of what you're looking for and they put that into MLS and a list of what you're looking for comes up, your price range, etc. Then, the agent goes over with you the listings that came up, from there you choose what you want to see and the realtor sets up the appts to see them, which can all be done in one day, and on your schedule.

 

[MyBabyBunnies]

okiron wrote:

Something small, 2 bedroom bungalow for $75k-ish. Or a repo-ed house that's being auctioned off. I'd be able to pay 3k-8k down payment. (That's 4-10%)

You can't evenbuy a decent empty townlot for that much here... :shock:I didn't think California was that much cheaper. Starter homes in this area are going for $275 000 and thats an old home. So definitely research the area and the prices before commiting, I've heard of a lot of stories of people being sadly decieved because they were so off on the prices of houses in other areas. Other than that, good luck with what you decide to do.

 

[okiron]

AngelsnSnuffy - I know I don't and I can't, hence me asking if an agent would be smart so they could do exactly what you just said instead of having to handle all appointments myself. I'm wanting to know if an agent would be smart, not what an agent would do for me.

Everyone who keeps telling me there are no houses for my price. YES THERE IS!!!! I wouldn't even have thought up the number or the destination if there was no such thing. Please do give me a little morecredit than that. It might be a junk on a lot but it's still something to start off with. Telling me I wouldn't handle it is one thing but telling me all the listings I've been looking at for the past month are not real is something else. I'm not an expert and once again admit my ignorance but I'm not stupid. I'm sorry for my aggitation but it does rub me the wrong way when it's implied I haven't done one of the most important research. I didn't pull a price out of my butt.

Edited for grammer and missed words.

 

[EdieRabbit]

Hi AngelnSnuffy,

I just got your email message. Ihave had quite a lot going on in my life and haven't been on the boards as much.I'm so sorry thatI didn't respond sooner. Yes, as an agent, I can give you some advice. Others have done so already, and I concur with a lot of it, disagree with some of it.

As far as your price range, I'm sure thatthere are more homes nowin California than even just 6 months agofor the price range you are looking in (due to the down market we have been experiencing since mid-summer...overinflated home prices are on the decline). For $75,000, you may end up getting somewhat of a fixer upper, but that isn't necessarily a bad thing. I have had two fixer uppers and they were both great homes with abit sweat equity.You can save a lot of money by doing things yourself (if I can learn how, anyone can...I didn't even know how to use a screwdriver when I bought my first home).

You might want topurchase a home warranty when you buy your home. It costs around $400 and you can even ask the seller to pay for it. That way, ifanything mechanical goes wrong withthe home during the first year (or longer if you choose to pay for the coverage), you pay a $55 deductible and the home warranty company sends someone out to fix the problem. It doesn't cover everything, but does cover the basics of most thingslike plumbing, electrical, appliances,heating and air, etc. You can rule out a lot of the bad when your have the home inspection,but this covers you further.

As Isaid, fixer uppers aren't a bad choice.I bought my first home for $73,000 and it was in great condition, although it had a few problems you would expect with a 55 year old house.Most of the things that I did to itwere cosmetic, like taking up carpet and refinishing the hardwood floors, replacing the countertop in the kitchen, painting the kitchen cabinets and changing out the hardware. When it was all said and done, I sold my home 4 years later for $89,000 and gained enough equity to pay off my student loans.

My second home, I bought for $100,000 and sold it 18 months later for $128,000 (after I got married). During the time I owned it, I put new flooring in it, painted it, changed the plumbing fixtures and replaced some of the lighting (about $7000 worth of improvements, but I was aggressive with them). I learned a LOT about home improvement through the work I did on those two houses that I would never have learned otherwise, which sparked my interest in real estate to begin with. I don't regret the experiences at all.

So, yes, I highly recommend buying a home if you can (which you seem to be a very good candidate). I work with first time home buyers all of the time who obtain 100% fixed rate financing and then ask the sellers to pay all of their closing costs, so they actually get a good amount of money back at closing. You can also get a GREAT deal with foreclosures.One couple I worked with bought a foreclosure for$75,000 and it is worth $115,000 based on the neighborhood comps. Another family bought a home that had appraised for $215,000 two years ago for $145,000 (although my broker told me that it was the best foreclosure deal he had ever heard of, so a deal like that isn't typical).

As far as a Realtor goes, you can work with an agent and if you don't like them for whatever reason, as long as you don't sign a buyers agency agreement with them, you can choose to work with someone else. They should have no problem taking you to see however many houses you wish to look at. I have shown 27 houses in one day before. I actually enjoy it. The key is to see everything that you can before making any decisions. That way you have peace of mind about your choices.

Watch out for the "there is an offer that is supposed to come in on this home this afternoon" ploy that agents like to use to get you to make an offer or offer more than you normally would. As a selling agent, it is often hard for me to tell when the listing agent is telling the truth or not about that, and it has happened so much lately that it is really starting to tick me off. Tell them to let you know when they have an offer in writing. I am SURE that the listing agent will call you back when the written offer does come in.Agents might lie by saying that they are "expecting" an offer to come in, but they are usually hesitant to lie about saying that an actual written offerhas comein if it really has not...they might have to document that.

Have your agentsearch for foreclosed homes on the MLS. You can also search for the HUD foreclosures at http://www.pyramidrealestate.com. Just keep in mind that people that lose their homes are not happy about it and usually take it out on the home (unfortunately), so you never know what you might find. Just be sure to get a home inspection!!!

Well, I have written a mini novel and I'm still not sure that I answered your questions. I hope that this helps you somewhat. Let me know if you have any other questions. I'd be glad to help you out!

Take Care,

Sandy (Edie's Mom)