Buying a House

[Hayley87]

I feel for you, @madelise! The Bay is so insane. The median age of residents has been steadily creeping up for ages because so few young people or young families can afford to enter the market.

...which is why other cities in NorCal are experiencing an influx of Bay émigrés, either who are leaving there entirely or are willing to commute 90+ minutes to work.

We bought our first home (a fixer in a middling neighborhood) when I was 25 and DH was 26 with 5% down and PMI--basically as soon as we could scrape the 5% together after paying for our wedding. We worked on it, did some DIY remodeling, and sold it last year for 40% more than we bought it for after having been there only 2 years! (The house is now worth another 20% more than what we'd bought it for).

We bought our forever home a year ago, and both this time and last, it was VERY difficult to be normal mortgage buyers because SO many Bay Area people are coming here with full-cash offers! DH and I feel very lucky to have purchased last year because some of our close friends just bought, and the house they finally got they offered on sight-unseen, within minutes of it listing. The houses here move so quickly now, it's absurd, and the prices just keep skyrocketing (case in point: my best friend's 2 bed/1 bath, 750 sq ft home in a popular part of town is worth almost $430,000!)

I never want to move again, simply because it's the most stressful thing! It's psychological torture: in order to psych yourself up enough to spend an enormous amount of money on a house, you have to convince yourself that it's THE ONE. When (probably many times) your offer isn't accepted, you feel gutted to have los out on "your" home.

 

[whitewave]

My friend had to buy sight unseen in Vallejo and it had been a rental and had holes in its walls. Crack head on the corner (living in the house on the corner) and next to houses that had like 12 people living in it.

Second house was in Santa Cruz mountains: 3 bedroom/1 bath 1500 sqft for $600,000

 

[madelise]

Love this! You'll do it, I know you will! Seems to me that EVERYTHING you set your mind to, comes to fruition. So I'm sending you dust - and hugs!

You're the sweetest ever, Minous!!!!!

 

[Natalie222]

House hunting sucks. I'm also stressed out and sad about it. You probably don't need more than 20% of selling price if you have good jobs/credit--but be prepared to pay for closing costs, which are a percentage of the price, unless you plan to offer more than asking price and roll the closing costs into the mortgage. We are also looking at houses (and have been for 6 months) but have heard from others that they looked at MANY more houses than we have, so that makes me feel better. We have taken it slow and only gone to view things that we actually think we would buy. We've made two offers and were outbid on both, but were okay with that as both sold for over our preferred budget. We have a saying: right house, right time.

I absolutely agree. Buying a house is a long and difficult process. That was the reason for my sister to address a real estate lawyer (https://gklaw.ca/). He knew the price tendency and could tell her what it was possible for her to buy at that time. Also he offered a consultation about the possibilities of buying the house and helped her to find it. Now she lives with her husband there. Maybe you can do the same way. Personally I think it is better to use a real estate firm service and be calm during the whole process of buying or selling a house.

 

[FeFeV]

We don't have children and we don't plan to. With wandering spirits that are prone to exploration and travel, home buying is just not for us (we came to this conclusion about 6 months ago). Our rent is less than $1k a month for our 3 bdrm house and we save a lot of money without much restrictions on what we buy or do. We appreciate the lack of stress even though we are the "Black Sheep" couple of our families (on both sides) for our non-traditional values. We both agree that we will buy property when we can build our dream cabin at the top of a mountain. My DH is an engineer and developer so he's an intense numbers person... We used the $50k wedding gift from his parents to pay off the remainder of his college loans (my debt was paid off a few years ago). We're completely debt free and enjoying the freedom of being such. We don't finance anything

 

[Akalahab]

We got engaged, bought a house, and paid for a wedding all in the span of 6 months last yr (we were 30 and 37). DH's first house in the U.K. is being rented out and we'll sell for a pretty good profit eventually (he bought when home prices were low). Ours is a 1800 sq foot 3 bedroom town home bc it didn't make sense to me to be paying utilities for and cleaning a larger home. Went for a D.C. suburb with great schools - one day will be turned into rental property and we'll buy a larger home when we have children.

We used Redfin and I checked Bankrate for the best mortgage rates, which were at the lowest last yr - around 3%! In the end, we paid no closing costs and actually got money back! Our house has also appreciated since last year.

We don't spend a lot, don't want much, have no debt apart from mortgage, and are more interested in building wealth for our future kids and retirement. Most of our spending is investment. I love sparkly things, but I'm happy with my low cost e-ring and the things we've been able to afford and how our investments have doubled in the past year bc we didn't spend a lot on it. In the future, we'll spend the money for his dream sports car, etc even if it will cost more later bc our money will likely appreciate more than the costs. Basically, we're not tempted by instant gratification. And the things that actually improve our quality of life - outdoor activities, travel, art - don't cost much to enjoy.

 

[madelise]

I should take pics and show you guys when I am house hunting. It's ridiculous.

Went to see two properties this past weekend. $1.2-1.4M in a city that is considered one of the most dangerous cities in this area. One of the houses was in a little cul-de-sac of little mini McMansions that take up every inch of the curb with minimal yard or landscaping. Everything is new but cheaply made. You knock on the doors and walls and it feels "empty". HOA is $500ish a month. The other house has illegal partitions built in everywhere, and holes in the floor hidden behind closet and storage doors. Not insulated. And storage space into the roof all have cracks that would allow bugs to come in. Apparently, the previous owners had created an illegal "house" out of the detached garage, and put in two bedrooms and a bathroom. The parking area is the "living room". There's a studio in the back they converted to another "house" with two rooms. To sell it, they had to cheaply tear everything out.


I wish I took photos for you guys. It's just humorous at this point.

 

[madelise]

We just went through two lenders and got approved for a healthy loan. Cue the stress levels rising!!!

 

[Hayley87]

We just went through two lenders and got approved for a healthy loan. Cue the stress levels rising!!!

Congrats! Stressful, but good-stressful!

 

[t-c]

We just went through two lenders and got approved for a healthy loan. Cue the stress levels rising!!!

What is a healthy loan and why do you need two lenders?

 

[madelise]

Congrats! Stressful, but good-stressful!

Thank you Hayley! It'll be "good" stressful after it's done

 

[madelise]

What is a healthy loan and why do you need two lenders?

I inquired with two. Picked one. A healthy loan is one that can buy me a house in the SF Bay Area without needing to sell my soul to the sellers or resort to living in dangerous neighborhoods or live in a dilapidated shack.

 

[Dancing Fire]

I inquired with two. Picked one. A healthy loan is one that can buy me a house in the SF Bay Area without needing to sell my soul to the sellers or resort to living in dangerous neighborhoods or live in a dilapidated shack.

Congrats, when is your open house?. Are we all invited?..

 

[madelise]

Congrats, when is your open house?. Are we all invited?..

Lol. Who knows. The next battle is having someone sell us a home with a mortgage instead of selling to an overseas investor with full cash above asking price.

When is your open house in the mean time? I'll invite you to mine if you invite me to yours.

 

[t-c]

Lol. Who knows. The next battle is having someone sell us a home with a mortgage instead of selling to an overseas investor with full cash above asking price.

When is your open house in the mean time? I'll invite you to mine if you invite me to yours.

I thought you don't get approved for a mortgage until you find a house -- how would you know how much to borrow?

 

[Dancing Fire]

Lol. Who knows. The next battle is having someone sell us a home with a mortgage instead of selling to an overseas investor with full cash above asking price.

When is your open house in the mean time? I'll invite you to mine if you invite me to yours.

Our house is a mess...

 

[royalstarrynight]

I've been tracking a neighborhood near you that is considered dangerous for fun and the prices have totally been surprising me! I never expected a those houses to sell at $1.3million which was about $50-100k above listing.

The violence has been going down significantly over the years there though I wouldn't walk around that neighborhood flashing crazy diamonds.

Sending you lots of luck!

 

[jaaron]

I thought you don't get approved for a mortgage until you find a house -- how would you know how much to borrow?

You can be pre-approved for up to a certain amount, which allows you to act quickly in a competitive market in which you would most likely lose the property if you had to go through the approval process after offering.

 

[t-c]

You can be pre-approved for up to a certain amount, which allows you to act quickly in a competitive market in which you would most likely lose the property if you had to go through the approval process after offering.

I understand pre-approvals, but @madelise said she was approved. And i thought she'd been house-hunting for a while so I just assumed she had a pre-approval.

 

[madelise]

I've been tracking a neighborhood near you that is considered dangerous for fun and the prices have totally been surprising me! I never expected a those houses to sell at $1.3million which was about $50-100k above listing.

The violence has been going down significantly over the years there though I wouldn't walk around that neighborhood flashing crazy diamonds.

Sending you lots of luck!

Thanks babe! I just saw your DMs this AM! Ya, I spent a weekend scouting houses there and everything I saw was awful for $1.2-1.5M. Like, literally dilapidated.

 

[madelise]

I thought you don't get approved for a mortgage until you find a house -- how would you know how much to borrow?

You can get guaranteed approvals (at the suggestion of a now amazing real estate agent PSer) because no one wants to sell to someone with a preapproval here if they can sell to someone with cash offers. I forget what it's called. We requested an amount that is healthy based off of the current market and our down payment.

 

[madelise]

You can be pre-approved for up to a certain amount, which allows you to act quickly in a competitive market in which you would most likely lose the property if you had to go through the approval process after offering.

Even pre-approvals fall through.

We saw a house we really wanted. In one week it was on the market, it had multiple offers & sold. Sellers are looking for all cash deals or those guaranteed lending now.

That house is now my holy grail of "damnit I wish we were prepared for that"..

 

[t-c]

You can get guaranteed approvals (at the suggestion of a now amazing real estate agent PSer) because no one wants to sell to someone with a preapproval here if they can sell to someone with cash offers. I forget what it's called. We requested an amount that is healthy based off of the current market and our down payment.

That's really interesting. In my market a majority of the sales are all cash and those who finance usually waive the mortgage contingency. I haven't heard of a guaranteed approval, but maybe that's what buyers have when they waive.

So what happens if you find a house that's more than your approved amount? Do you have wiggle room?

 

[Rhea]

me - mid 30s, dh - early 30s.

I'm in London, England. Not Central but not exactly the outskirts either. I'd love to live more centrally but this is where we can afford and I don't see us moving more centrally since I'd like a larger property. Combined we have above average salaries, don't spend much money, eat out often, or take holidays. It took us about 8 years of active savings which included living in a less than ideal location. If we'd chosen to purchase in a cheaper area we could have cut that time down to saving for 5 years, but I couldn't cope with commuting 3 hours a day. We are among the last of our friends to own property, but most of them had assistance from their parents and live further out than we do.

We struggled with the moving goal posts too. We knew they were coming and planned for them as best as we could.

 

[madelise]

That's really interesting. In my market a majority of the sales are all cash and those who finance usually waive the mortgage contingency. I haven't heard of a guaranteed approval, but maybe that's what buyers have when they waive.

So what happens if you find a house that's more than your approved amount? Do you have wiggle room?

The loan is for the upper end of our budget. Our wiggle room is more in the south numbers or we won't buy. We really are maxing out of our comfort zone as is. :/

 

[madelise]

29

 

[partgypsy]

Honestly what I would do if I was you, is delinate the area you feel you have to live for your own sanity, and buy whatever it is in or below your price range, for the lot. Building a house costs what 150K? That way you can afford where you live. Think outside the box. I have no idea what the regs are, but I had friends who did this. They basically lived in a trailer while their house was eventually built.

 

[madelise]

Honestly what I would do if I was you, is delinate the area you feel you have to live for your own sanity, and buy whatever it is in or below your price range, for the lot. Building a house costs what 150K? That way you can afford where you live. Think outside the box. I have no idea what the regs are, but I had friends who did this. They basically lived in a trailer while their house was eventually built.

You missed my post

And, there are no lots available out here for under $2M.

 

[azstonie]

Honestly what I would do if I was you, is delinate the area you feel you have to live for your own sanity, and buy whatever it is in or below your price range, for the lot. Building a house costs what 150K? That way you can afford where you live. Think outside the box. I have no idea what the regs are, but I had friends who did this. They basically lived in a trailer while their house was eventually built.

Be careful: local government regulates building and most 'desirable ' and developed communities don't go for the above. Communities with relaxed regs would allow this, with certain caveats.

 

[partgypsy]

Azstonie, I would normally agree with you, but I am surprised at what people are able to get away with. In my town, someone bought a smaller, but well-maintained house in a historic neighborhood. They even signed something for the owners promising they would not make significant changes to house. And- the house became a tear down. So my cynical self is thinking there are ways to get around stated regulations.