Help!!!! First time home buyer in Cali

[bvilchez]

My wife and I are going to begin house shopping when I return home on leave. The only thing is I don't know where to start. There is so much out there and I just want to make sure my family gets the best. I see houses being sold at $250k and people make offers of up to $310k on houses (or so the listing agent says). How can I make sure my offer(s) go through....put
$5k for earnest money?

It's just so many questions and so much out there it's insane.

At least we have made up our mind that we want to live in Temecula, CA out in Riverside County.

Anyone know where I can start? I've already been on Realtor.com and Zillow and seen some houses and my wife has gone and seen the residences in person as well. Also does the VA loan mean anything nowadays? Hopefully it makes the banks pick the individual with it because it is guaranteed money from the gov't.


Sorry to ramble on all over the place but I'm just real excited and at the same time lost and nervous. Any help would be appreciated.

[macpappy]

The VA loan is still a good thing. You do your paperwork with the VA, get the form back from them saying that your loan is guaranteed and pre-approved up to a set amount and you shouldn't have a problem with the mortgage company. At least that's how it was when I used it to start buying my house back in 1993.

I had my VA paperwork in hand before we started house hunting. That gave me a better idea of what we could afford to buy and helped me dodge what would have been a big mistake. One of the houses we really liked was in a waterfront community but it was more than what the VA would guarantee so we passed on it. It was destroyed in Hurricane Katrina.

Sorry you have to buy in California though.

[RGD.]

One note is to get a home inspection done and make any offers contingent on it. Don't accept a sellers home inspection - get your own done. Check the qualifications of the home inspector.
If you find a home that does need repairs either have the current owners repair it and provide documentation that a licensed company/individual did so. If money is to be held back for the repair - get estimates and don't accept and arbitrary amount.

I'm in the structural repair business and see new home owners burned on this constantly. For example one customer I'm working with just bought a home - the seller told him it needed waterproofing and held back $8000. Problem is the home not only needs $7000 in waterproofing - it also needs another $16 grand in structural repairs.

Don't skip the home inspection!

Best of luck to you and your wife -


Ron

[Smokin Gator]

That is about the best advice you will get.

I would also add... don't get your heart set on anything. It is only a house. Make the offer you want to make. If they don't take it don't hesitate to walk away.

[chippewastud79]

Have a pre-approval ready to go. It gets your offers taken a lot more serious.

Always know what you can afford and don't get roped into anything other than a standard loan, never an ARM.

Always have a home inspection and by the most respected inspector you can find. Should take them hours to do everything, not minutes.

Look at as many properties as you have time for, don't keep yourself restricted and settle on the first house you see. Don't force it, if you can't find the perfect house, don't worry about it.

Always bargain, especially in this market. There is no such thing as a low offer, offer $10-20K less than what they are asking. There are plenty of motivated sellers out there, negotiate everything. Ask for closing concessions, a home warranty, repairs, everything. The worst they can say is "no".

Get a good realtor. You are the buyer so they get paid by the seller, don't go with any realtors that charge any kind of consulting fees or anything but their standard commision.

Good luck with the purchase of a home

[bvilchez]

This is all great advice. But say for example my wife and I like a house, do we get the inspection before the offer or after?

Already working on an agent. California is FULL of them.

I appreciate the advice. I'm all excited and everything and I know how I rush into things. But i just can't rush into this. Too expensive of a buy. Most expensive things I've ever bought were a box of God of Fire, wife's engagement rings and my Tahoe.

Please keep the advice coming. Thanks

[pnoon]

Originally Posted by chippewastud79

Have a pre-approval ready to go. It gets your offers taken a lot more serious.

Always know what you can afford and don't get roped into anything other than a standard loan, never an ARM.

Always have a home inspection and by the most respected inspector you can find. Should take them hours to do everything, not minutes.

Look at as many properties as you have time for, don't keep yourself restricted and settle on the first house you see. Don't force it, if you can't find the perfect house, don't worry about it.

Always bargain, especially in this market. There is no such thing as a low offer, offer $10-20K less than what they are asking. There are plenty of motivated sellers out there, negotiate everything. Ask for closing concessions, a home warranty, repairs, everything. The worst they can say is "no".

Get a good realtor. You are the buyer so they get paid by the seller, don't go with any realtors that charge any kind of consulting fees or anything but their standard commision.

Good luck with the purchase of a home

Lots of good advice here but I would disagree with what I bolded. In a "normal" market, you would be correct but in today's market, it is very common for there to be dozen(s) of offers on a home - many of which are well above the asking price. Yes. It is a buyers market but there are so many buyers, many are getting more than their asking price. I just went thru this helpiing my daughter buy her first home. Virtually impossible to find something nice and get it for less than the asking price. (Note: This perspective is based on the market here in southern California. Other areas of the country may be different.)

[chippewastud79]

The inspection is made after an accepted offer. There is a timeline for all of these things. I believe you have 30 days after an accepted offer to get an inspection and there are many results that can void a contract if there are any blaring problems that the seller will not fix. Inspections can also reveal problems that can be deducted from the price if the seller doesn't agree to fix them.

Originally Posted by pnoon

Lots of good advice here but I would disagree with what I bolded. In a "normal" market, you would be correct but in today's market, it is very common for there to be dozen(s) of offers on a home - many of which are well above the asking price. Yes. It is a buyers market but there are so many buyers, many are getting more than their asking price. I just went thru this helpiing my daughter buy her first home. Virtually impossible to find something nice and get it for less than the asking price. (Note: This perspective is based on the market here in southern California. Other areas of the country may be different.)

Being unfamiliar with the Southern California market, you may have gotten me on that one.

I would still hestitate to say making any offer close to the asking price is a good move. There are always room for negotiations and if there are a number of offers that drive the price over what he is willing to pay, it would be easy to walk away.

I wish you the best of luck. This is a very exciting time in your life, for sure, so just keep a level head and heed a lof of this good advice.

Originally Posted by bvilchez

But say for example my wife and I like a house, do we get the inspection before the offer or after?

Already working on an agent. California is FULL of them.

You do the inspection after the offer. If something pops up that concerns you, you can always get out.

We have used the same realtor for the past ten years and owe our getting into our first home to her. She is amazing and an incredibly hard worker. Seriously, we wouldn't have been able to get our first house if it wasn't for her. That won us over from the start and she's never faltered. She doesn't take a commission if you're a buyer unlike some others I've heard about. If you want her number, PM me. She works all over Southern CA.

Originally Posted by RGD.

I'm in the structural repair business and see new home owners burned on this constantly. For example one customer I'm working with just bought a home - the seller told him it needed waterproofing and held back $8000. Problem is the home not only needs $7000 in waterproofing - it also needs another $16 grand in structural repairs.

Hey Ron - We had this very same thing happen to us....because we wanted a particular house, we agreed to get some money from the sellers to fix a problem that cost WAY more to fix ($17k) than the $1,500 we got off the pricetag. So bvilchez, be careful!

Originally Posted by Smokin Gator

I would also add... don't get your heart set on anything. It is only a house. Make the offer you want to make. If they don't take it don't hesitate to walk away.

Very good advice. Tough to stick to but stick to it!

Originally Posted by chippewastud79

Have a pre-approval ready to go. It gets your offers taken a lot more serious.

Always know what you can afford and don't get roped into anything other than a standard loan, never an ARM.

Always have a home inspection and by the most respected inspector you can find. Should take them hours to do everything, not minutes. Oftentimes, your realtor (and ours did) will provide you with a very reputable inspector.

Look at as many properties as you have time for, don't keep yourself restricted and settle on the first house you see. Don't force it, if you can't find the perfect house, don't worry about it.

Always bargain, especially in this market. There is no such thing as a low offer, offer $10-20K less than what they are asking. There are plenty of motivated sellers out there, negotiate everything. Ask for closing concessions, a home warranty, repairs, everything. The worst they can say is "no".

Get a good realtor. You are the buyer so they get paid by the seller, don't go with any realtors that charge any kind of consulting fees or anything but their standard commision.

I agree with Peter that this is a buyer's market with some exceptions. Everybody is thinking that since home prices have come down some, that now is time to buy. You're not the only one thinking this, so yeah, you're right, you might enter into a bidding war. Especially if you think the home you're considering is a good one. If you think it, then it's likely somebody else out there will think so too.

But don't let that discourage you. You have the power and the choice whether or not to enter into the bidding war. We did on our first house in 2001 and won out because we didn't make demands like the other couple (they wanted the washer/dryer, fridge, etc.). Try not to make too many demands like that. Let your bid do the talking.

Be aware that Zillow gives you a rough idea but is not always accurate.

Again, if you'd like our realtor's number, just PM me. Lots of our friends have used her and have been extremely happy. Best of luck to 'ya!

[pnoon]

Originally Posted by chippewastud79

Being unfamiliar with the Southern California market, you may have gotten me on that one.

I would still hestitate to say making any offer close to the asking price is a good move. There are always room for negotiations and if there are a number of offers that drive the price over what he is willing to pay, it would be easy to walk away.

No doubt. But my point is that you will be "walking away" for a looooong time. It took us about 5 months of looking/offering before we closed the deal. Many people don't have that kind of time or are unwilling to play the waiting game.

[chippewastud79]

Originally Posted by pnoon

No doubt. But my point is that you will be "walking away" for a looooong time. It took us about 5 months of looking/offering before we closed the deal. Many people don't have that kind of time or are unwilling to play the waiting game.

I agree, buying a house is never something to be rushed. Walking away can be frustrating, but you have to do what is best for you and not settle for something as a compromise.

[macpappy]

One thing I haven't seen mentioned and I apologize in advance to anyone who may be offended.

When you find a real estate agent tell them to look a homes under bank foreclosure. I not sure if it's the same in California as it is here, but the agent I had suggested looking at homes that mortgage companies had foreclosed on because they could only sell them for what was owed on the mortgage. By doing that it put us in a nice 4 bedroom/2 car garage on the biggest lot in the subdivision for almost half of what comparable homes were selling for.

Just a thought.

[RGD.]

Originally Posted by mrreindeer

Hey Ron - We had this very same thing happen to us....because we wanted a particular house, we agreed to get some money from the sellers to fix a problem that cost WAY more to fix ($17k) than the $1,500 we got off the pricetag. So bvilchez, be careful!

Sorry to hear that happened to you. Just reinforces my point on how important it is. In the case I referenced above - guy was trying to move in before Christmas - first child is due anytime now - and when I got there the gas company was there fixing various gas leaks - a waterproofing company had started and stopped work on a sump pump system (which he didn't need) and the guy was just plain upset as one would expect. He didn't have a clue he should have had a home inspection.

Worst one few years ago - and now this couple both have Phd's so you think they would of had a clue at least - anyway, the Realtor tells them it's not bad and will only run them about $2 grand to fix. $126 thousand later after replacing three basement walls . . . .

I have a ton of stories - none of them pretty . . .

Always get a home inspection -


Ron

[livwire68]

We just purchased about 6 mo. ago our first. We are in Vegas which has a very different market. We looked at over 100 homes across the valley and every one was a foreclosure. There were a few for sale either by owner or short sale. Short sales can be a pain in the arse (too many middlemen), better to go straight for a foreclosure. I would also only go for a foreclosure if they are abundant in the area, otherwise compitition will drive up the price. Great advice on not getting hopes up high, we were a day away from signing our closing papers and the deal fell through. In our market we made multi-offers and had multi- acceptances. The house we actually got was under contract which fell through and we were getting ready to go under contract on another house. We hesitated on our contract to see if others accepted and we got a house we wanted more and only paying $10,000 more for one that suited our needs bucause their deal fell through. We got at $5000 below asking price because we also had to include down payment assistance in the overall loan. Pre-approval letter is a must! I knew what we wanted in a house, I went through 2 realtors, the first being a friend (word of wisdom, dont do business with a friend) We are still friends but we lost the first house due to his screw up, we made amends. I did most of the searching on realtor.com and a local search where I could add my specific criteria, I then gave the list to the realtor who researched them with her special realtor only info. and she gave me the low down and we chose which to see from there. Aslo do not let your realtor know you are in love with a house, many will push you into making an offer with out looking at others (again depends on how aggressive your market is) A good realtor will show you many, if you have one doubt about a house they will move on and not push you into a house. If you have a doubt about one put it at the back of the stack and keep looking. If you do not get the house you want there is a reason, the right one will come along even with much discouragement. Hope this helps, it is some of what we went through in our market.

Originally Posted by RGD.

Worst one few years ago - and now this couple both have Phd's so you think they would of had a clue at least - anyway, the Realtor tells them it's not bad and will only run them about $2 grand to fix. $126 thousand later after replacing three basement walls . . . .

Always get a home inspection

Yikes! Just remember that getting that home inspection helps a lot, but didn't help us with that damn leak. The inspection doesn't guarantee you won't have any problems, it just lets you know what might need addressing before you take ownership.

Could the house collapse after inspection and the day you move in? Sure, but those inspectors (the good ones) do a good job at detecting the issues.

It was our choice to stick with the house we wanted and accept the $1,500 drop in price to 'take care of the leak'. To do over again, I would have demanded that they continue fixing the leak instead of telling us that they've tried & okay, we'll take off $1,500 for you to do the rest. We bought in a seller's market, though, had lost the first house because of a terrible realtor we used before finding the good one and did have another couple bidding with us. It was either them or us on this one too and we chose to bite the bullet and take on the problem.

You make the choices as they're presented to you. If there are too many issues that you'd rather not address, you're in the right place because there are plenty of other homes out there.

[MikeyC]

Originally Posted by mrreindeer

Yikes! Just remember that getting that home inspection helps a lot, but didn't help us with that damn leak. The inspection doesn't guarantee you won't have any problems, it just lets you know what might need addressing before you take ownership.

Could the house collapse after inspection and the day you move in? Sure, but those inspectors (the good ones) do a good job at detecting the issues.

It was our choice to stick with the house we wanted and accept the $1,500 drop in price to 'take care of the leak'. To do over again, I would have demanded that they continue fixing the leak instead of telling us that they've tried & okay, we'll take off $1,500 for you to do the rest. We bought in a seller's market, though, had lost the first house because of a terrible realtor we used before finding the good one and did have another couple bidding with us. It was either them or us on this one too and we chose to bite the bullet and take on the problem.

You make the choices as they're presented to you. If there are too many issues that you'd rather not address, you're in the right place because there are plenty of other homes out there.

Home Inspectors can only point problems. They're kind of "jack of all trades master of none" kind of guys. I don't know how it works in CA, but here in MA after you have your initial inspection you're allowed to have follow up inspections as long as it is within the inspection period designated in the offer. This is a good time to bring in contractors who are experts in these areas and will give you a much more accurate idea of how much it will cost to fix an issue found during the initial inspection. In fact, here in MA most home inspectors will not even risk venturing a guess as to repair costs as they are not experts in the matter and are afraid of a lawsuit.

Also, as a realtor, I never advise my clients to allow the homeowner to fix any issues from the inspection unless it's something as simple as a squeaky door. Call in a contractor during the inspection period, get an accurate estimate of how much it will be to fix, and negotiate a credit for closing costs equal to the repair cost. Mainly I tell people this because the homeowner will have the problem fixed in the absolute cheapest, shoddy manner possible. So, it's better to get the money and fix it yourself after.

[MikeyC]

Originally Posted by livwire68

We just purchased about 6 mo. ago our first. We are in Vegas which has a very different market. We looked at over 100 homes across the valley and every one was a foreclosure. There were a few for sale either by owner or short sale. Short sales can be a pain in the arse (too many middlemen), better to go straight for a foreclosure. I would also only go for a foreclosure if they are abundant in the area, otherwise compitition will drive up the price. Great advice on not getting hopes up high, we were a day away from signing our closing papers and the deal fell through. In our market we made multi-offers and had multi- acceptances. The house we actually got was under contract which fell through and we were getting ready to go under contract on another house. We hesitated on our contract to see if others accepted and we got a house we wanted more and only paying $10,000 more for one that suited our needs bucause their deal fell through. We got at $5000 below asking price because we also had to include down payment assistance in the overall loan. Pre-approval letter is a must! I knew what we wanted in a house, I went through 2 realtors, the first being a friend (word of wisdom, dont do business with a friend) We are still friends but we lost the first house due to his screw up, we made amends. I did most of the searching on realtor.com and a local search where I could add my specific criteria, I then gave the list to the realtor who researched them with her special realtor only info. and she gave me the low down and we chose which to see from there. Aslo do not let your realtor know you are in love with a house, many will push you into making an offer with out looking at others (again depends on how aggressive your market is) A good realtor will show you many, if you have one doubt about a house they will move on and not push you into a house. If you have a doubt about one put it at the back of the stack and keep looking. If you do not get the house you want there is a reason, the right one will come along even with much discouragement. Hope this helps, it is some of what we went through in our market.

Every market is a little different. Some have suffered much more of a collapse than others and this will even vary from town to town in the same state. Buying a foreclosed property can certainly save you some money, but the buyer takes on additional risk that they don't during a "normal" transaction. Also, DEFINITELY stay away from short sales. With a short sale, you'll be lucky if you can close on the home a year after you make the offer. Also, like in a foreclosure situation you take on additional risk.

[bvilchez]

WOW!!!!! Lots of info to tackle but definitely good info.

I really appreciate the time everyone has taken to give me some input on this. I know myself and don't want to get carried away.

Keep them coming if you can. I'm literally taking notes on this.

[yourchoice]

Originally Posted by pnoon

...it is very common for there to be dozen(s) of offers on a home - many of which are well above the asking price. Yes. It is a buyers market but there are so many buyers, many are getting more than their asking price.

Well good for you guys! In these parts, I've seen (and received) offers 10, 20 even as much as 50K less than asking (on a 350K +/- home). Firsthand, I don't remember seeing anything above asking for a long while. I'm not a realtor, but in the real estate business (new home builder).

Good luck in finding the home you want...there should be plenty from which to choose.

[bvilchez]

Originally Posted by pnoon

In a "normal" market, you would be correct but in today's market, it is very common for there to be dozen(s) of offers on a home - many of which are well above the asking price. Yes. It is a buyers market but there are so many buyers, many are getting more than their asking price. I just went thru this helpiing my daughter buy her first home. Virtually impossible to find something nice and get it for less than the asking price. (Note: This perspective is based on the market here in southern California. Other areas of the country may be different.)

Funny thing happened. I called to inquire about a house that my wife wanted to go and see. The asking price is $250k but one of the first things the listing agent stated was that they have offers as high as $308.

So then a question I ask myself is why have they not closed on this deal yet? Are you trying to talk me out of making an offer or trying to get me to bid higher? I may have never bought a house before but I wasn't born yesterday either.

My next question to everyone (especially the realtor BOTLs) will be military help with ta VA loan in today's economy? I'm not gettting laid off or will be losing my job until I retire (which is no time soon). Shouldn't the sellers and the banks see that as a solid individual?