Taking the plung from renting into home buying...

[shadowkat]

So, the stars and planets are aligning and every one is telling me if I ever want to own a home to do it, NOW. Ugh.

Truth is, I want to. I need a bigger place, with certain amenities - such as either an elevator or safe steps, and laundry in the building. Not to mention a kitchen with more space to cook in. Don't need a house, just a two bedroom or one bedroom condo or apt would be nice.

But I'm not sure how to go about it. All I've done is apartment hunting - rentals. So, feel a little overwhelmed by the whole thing.

Do I get a broker?
What is the cost of buying a home? Can I even afford it?
How does one go about getting a mortgage?
Do you need a lawyer? (Yes, I went to law school but I know zip about real estate law and it was a long time ago that I studied law, plus not in NYC)
How do you know what a good or bad deal is?

What I'm trying desperately not to do is freeze. I tend to procrastinate and freeze, when things overwhelm me. Distract myself. Make excuses. And shut down. Been trying really really really hard these past few months not to retreat into a hole and shut down. Because that's what I've done in the past when thing got gnarly and tough and painful. I shut down and retreated. It doesn't work. The problems do not go away. If anything, they percolate and ferment while your sitting in your cave ignoring them. So by the time you poke your head out - everything is about fifty times worse.

But tis hard.

Anyhow if anyone out there has ever bought an apartment or place in a city and has some advice they wouldn't mind sharing or links or even book suggestions on how to go about this?
Mucho appreciated.

Comments

[2maggie2.livejournal.com]

I've bought houses in California and the midwest, but never a condo in the city. So that probably makes things different. But here's advice from househunting experience and a bit of a thought as an economist:

1. Think more about the advice to buy now. Again, not familiar with NYC. But basically the caution it that we've been in an era of steady appreciation -- but that's less likely to be true post-bubble. Housing can go for long stretches at flat. And there's still some diciness about the length and severity of the recession, which means that housing prices could still drop further. That's not to say it's a bad idea. But be sure the people giving you advice are factoring in a very real possibility that we are now in a new economic era with new economic assumptions. [If their advice just is that we're at a bottom and you should buy now, think a third time about it. If they have more to say about their advice it's worth listening to -- every housing market area is unique so you want local advice).

2. Get a broker. It doesn't cost you anything. The buyer's broker shares the commission with the seller's broker. However, don't necessarily plan on buying what the broker shows you. Use the broker to help you get a feel for the market. You should look at as many places as possible, and that'll give you a feel for how price should vary with square footage, location, and amenities. That should give you a sense of some important things: (a) you'll find out what you are really looking for -- you're reactions will tell you. For me, for example, I found out that I really wanted a fireplace. (b) you'll get a feel for what's well-priced. It takes a lot of work to do it this way. But I did it and got a house that I loved and that was a bargain.

3. Don't be set on buying through your broker. Their incentives are off -- namely they want a deal closed sooner rather than later, and the higher the price the better. (It's all about commission for them). A good broker won't be blatant about it, but they aren't going to bargain as hard for you as they might. Definitely get advice from people about good brokers. But even with recommendations bear in mind at all time that their incentives are not the same as yours. Your ability to work well with them is going to depend a lot on your ability to stand up for yourself.

4. Spend the money on the inspections. Definitely get recommendations for a good trustworthy inspector. Again, not obviously a good idea to go through your broker on this. (They want inspectors who think everything's ducky so the sale goes through faster).

5. In budgeting: It's hard to get anyone to give you a straight answer about closing costs. So leave a fudge factor. You'll know to add mortgage cost to whatever fees go with your condo. But don't forget about property taxes and insurance. Also, repairs are a total pain. I currently own my home out right, and it's still not obvious that I'm paying less than my friends who rent. No doubt the repairs and upkeep are worse for a house. But then, I don't have condo fees either. Anyway. Point is it's more expensive than you think.

Personally when I move I don't think I'll ever buy again. I'm not a hammer person. It's stressful for a worrier like me (who knows what big repair hits next month). And buying and selling real estate is really stressful. Especially when you are on the selling side.

Good luck!

[cakmpls.livejournal.com]

Our 25-year-old daughter is buying her first house (and is the first of our kids to buy), so we've just been through this.

Re #s 2 and 3: I agree, and I emphasize: your broker does not work for you. You are not paying them, and they earn no money if you do not buy a house through them.

Definitely get your own inspection. If you subscribe to Angie's List, or know someone who does, look there for recommendations. (You could look there for a broker, too.)

You don't need a lawyer, but I'll bet that a huge proportion of the people who are now losing their houses didn't have one. Not only are the documents dense and full of jargon, but according to my lawyer-husband, virtually every realtor/broker he has ever worked with was under the impression that the way they had always done things was the only way to do things--and it never was, really. He has a fairly high opinion of closers, however.