Buying a home

[KarateKen]

Dear Karate Forums members,

I am in the process of shopping for my first home, a condo, and would appreciate any feedback, especially if you have experience buying a condo or in real estate.  I am finding so far there are a lot of things to factor in.  Price, location, building structures, neighbors, HOA, inspections, and on and on. As I mentioned this is my first time through the home buying process, and I have no background in real estate, so I am learning as I go.  I have probably looked at 12-15 locations so far and keep finding problems with them.  I did make an offer earlier this week, however after inspection I am started to reconsider.  What are some red flags to look for? How do I manage the stress of the process?  I am working with an agent who has over 25 years' experience, this was after meeting with four agents and deciding on who to work with, including one who I fired. 

Thanks for the feedback, I am finding the whole process to be nerve wracking.  I am not enjoying this at all, instead of being excited about finding a home to own I just dread and worry about what can/will go wrong. 

[sensei8]

I’ve never bought a condo/honeycomb; I’ve always been a renter.

Many of my relatives have bought new homes; my dad built 2 house; one for his mom and one for himself.

My understanding about buying a home is that one should NOT buy a home in a HOA community because the HOA can be a nightmare; they can end up taking your home away.

Good luck in your search!! Please keep us updated.

 

[KarateKen]

My understanding of HOAs is that they can make things miserable.  Many are not well managed and the people who run them are often unpaid volunteers who create petty rules and are selective about enforcing them.  The goal behind the HOA is to make sure that people are taking good care of the outside of their homes to make sure they go up in value, but sometimes the board members abuse their authority, and it can be challenging for the homeowners the fight back.  

[Patrick]

My experience is mostly watching my parents buy a few homes over the years. We actually bought a house a few years ago, but the inspection came back so bad that we went ahead and backed out. It sounds like you've probably already found the one thing that I recommend to folks: An inspector who will give you reasons not to move forward.

I feel like the whole system is generally adversarial to buyers. Even people operating on your behalf are often trying to simply complete a sale. For me, having a good inspector alleviates a lot of the stress I would feel because at the point of buying, I have come to terms with the financial investment and the fun side of it - the life it creates - but the inspector helps deal with the unfun side. We paid for a normal inspection, plus a termite and sewer inspection, and I'd do it again.

I'll never forget the moment the inspector crawled out from under the building and said, "it looks like mold," and the real estate agent basically cut him off to say, "it could be [whatever he said]," like she wasn't let him talking. Sure enough, it was mold. Several types, including two black mold, and all sorts of other issues. If we buy again, I'll go back to that inspector if he's still around.

[KarateKen]

9 hours ago, Patrick said:

My experience is mostly watching my parents buy a few homes over the years. We actually bought a house a few years ago, but the inspection came back so bad that we went ahead and backed out. It sounds like you've probably already found the one thing that I recommend to folks: An inspector who will give you reasons not to move forward.

I feel like the whole system is generally adversarial to buyers. Even people operating on your behalf are often trying to simply complete a sale. For me, having a good inspector alleviates a lot of the stress I would feel because at the point of buying, I have come to terms with the financial investment and the fun side of it - the life it creates - but the inspector helps deal with the unfun side. We paid for a normal inspection, plus a termite and sewer inspection, and I'd do it again.

I'll never forget the moment the inspector crawled out from under the building and said, "it looks like mold," and the real estate agent basically cut him off to say, "it could be [whatever he said]," like she wasn't let him talking. Sure enough, it was mold. Several types, including two black mold, and all sorts of other issues. If we buy again, I'll go back to that inspector if he's still around.

Despite the seller doing nearly 40 grand in renovations the inspector still found many issues.  Heating and air, plumbing, electrical issues, problems with the doors and windows to name some.  The water heater was ten years old and not installed properly, plus the pipes connecting it were old and corroded.  That entire thing would need to be replaced.  Plus, it did not have the proper protections if it were to break, and water would leak and cause water damage and likely mold.  The inspector said that could happen any day.  Also, the AC was 25 years old.  An AC does not last forever and is very expensive to replace.  It was looking at 15k-20k in repairs

On the positive side it has brand new floors, a renovated kitchen with a new stove, sink, and counter, as well as the bathroom counters and one of the showers.  No mold, gas leaks, pest problems, or issues with the foundation.  

The inspector told me these are all typical issues.  I was thankful for how thorough and professional they were.  I would use them again, so I understand your feeling on that one.

One of the stresses of home ownership is that there is usually a problem.  Something needs to be fix, replaced, or improved.  This place was built in 2001, but I've known people who lived in homes that were over 100 years old, and there is always something wrong.  Home ownership has its blessings, but it comes with a price. 

I also agree that some agents are more interested in rushing to a sale and a payday than helping you find the right home.  I went through several agents before landing on my current one who is being patient with me. 

[aurik]

So far I've bought 2 homes -- one was new construction, and one was previously lived in.  I'll tell you, the process is VERY stressful.  In fact, my previous agent once told me that buying or selling a home is one of the 4 or 5 most stressful things in your lifetime.  (Right up there with getting married, getting divorced, dealing with the death of a close friend/relative, etc).  I know I'm a bit late to the party, but here are a few things to keep in mind:

- Make sure you aren't buying more than you can afford.  A bank will come up with a number you can QUALIFY for, and then the agent will probably try to sell you in that region. Do your own math and be realistic in what you can actually afford, and stick to that.

- Make sure you budget in for improvements/repairs.  Things can and will go wrong.  Less so on a new home, moreso on a 20+ year old one.  Our first home we bought together we lived in for 3 years.  During that timeframe we needed a new roof (hailstorms in Texas), a new upstairs A/C unit, and we needed to completely renovate a bathroom.  Make sure you have a contingency fund for these things.

- When your inspection report comes back, another way to use it is as a negotiation tool.  If you can get some additional seller concessions (reduced price, rate buydown, etc) as a result of that inspection, it might change the equation.  If you can get them to essentially pay for part of the repairs that are needed, it MIGHT make sense to move forward with the purchase.  Or it might be a reason to walk away from the deal.

Don't be afraid to walk away.  If you walk away from the contract, you lose your earnest money, but that's a small price to pay for the potential headaches that those kinds of repairs can cost.

[Patrick]

2 hours ago, aurik said:

- When your inspection report comes back, another way to use it is as a negotiation tool.  If you can get some additional seller concessions (reduced price, rate buydown, etc) as a result of that inspection, it might change the equation.  If you can get them to essentially pay for part of the repairs that are needed, it MIGHT make sense to move forward with the purchase.  Or it might be a reason to walk away from the deal.

I was just going to come back to say something like this. As you said, KarateKen, there is *always* a problem. So that means a problem isn't necessarily a reason not to do the deal. It just comes down to sorting minor and major problems, things that are cheap to fix vs. expensive, what you can live with, and what you can negotiate with. Getting the most out of this type of process is just a game of you not wearing down. Folks who process home after home after home are used to people wearing down. It sounds like you don't have the problem of falling in love, so that's good.

Back when we were buying, it was closer to worst of COVID, and we'd hear about people forgoing inspection as a way to be competitive which, unless you are incredibly wealthy and the home price is a minor inconvenience for you, just boggles my mind. The agent we had at the time pitched it in a "this is just what others are doing" way. But on the house we actually agreed to buy, she was trying to talk me into doing away with the mortgage contingency to make our offer stronger, since we'd already qualified. But why? I'll never beat a cash offer, so if that's what the seller was getting, that's cool. Otherwise, if we're pushing forward the biggest bag of money, they'll take it. And they did. 

Any pressure that anyone tries to put on you, you just have to kind of laugh it off. It sounds like you're already doing this. The only deadlines that exist are the ones in contracts. The rest are made up. The pressure might be real, but it could also be made up. And if it's real and you lose out, oh well, you still have your money!  When the house fell through, we stayed in the apartment, and our financial situation has improved dramatically just based on how financial markets have performed (example: the Dow is up 40% since we would have closed, while the NASDAQ is up more). Meanwhile, the buyers of the home we were going to buy tried to sell it recently for around a 10% profit (3.5 years later), and couldn't. It appears they may have rented it for far below what the mortgage payment would have been.

We have been talking about buying a home again, because I'd love to have more outdoor space for my toddler and for us. But we also love living in our neighborhood and my wife being able to walk to work. It's very much a city and an apartment area, which we enjoy, so I'm torn. Pros and cons for everything.