First Time Home Buyer Advice

• jpake1

  

  The soon to be fiance and I are about to begin searching for our first house. We're going to be paying in cash and we're looking in the range of 155-170k; looking to close around summertime. Lately, we've been talking about the pros and cons of possible going with a foreclosure and getting the most bang for our buck. If we go that route, we'll most definitely get a buyer's agent that specializes in foreclosures. I don't want a fixer upper that's gutted, just a nice foreclosure because of the discounted prices right now. I know locations plays a huge part, but does anybody have any decent idea about the sell-to-listing ratio discount on the foreclosure market nationwide? I've been reading a lot about 20%+ discounts on market value, just wondering if that's about right (of course every situation is different). If you guys have any advice on anything dealing with purchasing a home, it's much appreciated.
• dwccrew

  

  Personally I don't understand why if you have that much disposable cash to put towards a house, why would you want to buy a foreclosure? Money is cheap to borrow right now and you could put a nice downpayment on the house while investing the rest and making more money. Just my personal thoughts on it, but if you have over 100k in cash to buy a house with, go with a nicer one, not a foreclosure. Often, but not always, foreclosures have not been lived in for a period of time and are going to need a lot of attention. Look into short sales or just pay the money for a nice home.
• jpake1

  

  Maybe I'm wrong in thinking this way. But the reason we're entertaining the thought of a foreclosure is because we could possible target a foreclosed house with a market value of 190k and possibly pay around 150k for it (if those stats I've been reading are accurate of the foreclosure market), rather than pay market value for a regular house at 165k. A lot of the foreclosures around me are houses that are no older than 7 years and are quite nice. No way would I buy any foreclosure that's going to need a lot of repairs or touching up. Maybe those type of foreclosures are few and far between, but that's something I'm trying to figure out nowadays. Thanks for the advice, something to ponder.
• bigkahuna

  jpake1;1092195 wrote:Maybe I'm wrong in thinking this way. But the reason we're entertaining the thought of a foreclosure is because we could possible target a foreclosed house with a market value of 190k and possibly pay around 150k for it (if those stats I've been reading are accurate of the foreclosure market), rather than pay market value for a regular house at 165k. A lot of the foreclosures around me are houses that are no older than 7 years and are quite nice. No way would I buy any foreclosure that's going to need a lot of repairs or touching up. Maybe those type of foreclosures are few and far between, but that's something I'm trying to figure out nowadays. Thanks for the advice, something to ponder.

  A friend of mine got a foreclosure (2,000 sq ft 4 bed 3 1/2 bath with 1/2 finished basement and attached garage) for about 145K. It was built in 2005 and worth around 175-200K. The only thing that was wrong with it was 0 appliances and LOTS of nail holes in the walls. Besides that, it was in great shape. There are "NICE" foreclosures that are in great shape like you speak of, but it does take a little bit of work to find.
  
  You're idea isn't a bad idea. However, like dwc said, you can go either way. If you can find any house for a steal and do a lot of updates and changes to it, you'll turn a profit. Hell, my wife and I probably added about 10K in value to our house in the 2 years we've lived here just by re-flooring most of it, some landscaping, and doing some electrical and water updating (including wiring our shed for power).
• gerb131

  

  I bought a foreclosure and used the other 15k we were going to put down to make it nice. The neighbors hate me.
  But make sure you get a good home inspector.
• McFly1955

  

  We bought in 2007 for 110K (foreclosure). Neighbors directly on both sides of us bought in 2006 for 150K (same SF, similar houses).
  
  We are refinancing right now and our appraisal came in at 125K. Not many people who bought in 2006/2007 in our area can say their home is still worth more than they paid. Both neighbors for example are in the red 20-30K on the value (not factoring in their down payment, principal that has been paid off, etc)...It needed a lot of work...Not expensive work necessarily, just a lot of cosmetic stuff.
  
  I will likely buy another foreclosure next time around...
• bigkahuna

  McFly1955;1092410 wrote:We bought in 2007 for 110K (foreclosure). Neighbors directly on both sides of us bought in 2006 for 150K (same SF, similar houses).
  
  We are refinancing right now and our appraisal came in at 125K. Not many people who bought in 2006/2007 in our area can say their home is still worth more than they paid. Both neighbors for example are in the red 20-30K on the value (not factoring in their down payment, principal that has been paid off, etc)...It needed a lot of work...Not expensive work necessarily, just a lot of cosmetic stuff.
  
  I will likely buy another foreclosure next time around...

  We wish we would have done something similar. There was a nice house in a subdivision that the realtor said we could have stolen (our realtor was the listing agent as well). The entire house could have been fixed for around 15k. It was listed for like 80k because the lady was trying to move to Florida. I really think we could have increased to the 120 range at least with everything we could have done to that place. Instead, we bought a house in the 120 range and have minimally increased the value of it.
• lolpha

  You should probably just rent an apartment. I don't want to be bailing your ass out when your mortgage goes underwater.
• j_crazy

  

  Regardless of foreclosure or not. Summertime is a bad time to buy.
  Price-wise
• Con_Alma

  jpake1;1092166 wrote:... We're going to be paying in cash...

  Atta boy. Congratulations.
• jmog

  Paying cash is a great idea IF (and that's a huge if) you figure out what your monthly mortgage would have been. If you then take that money each month and put it into some sort of IRA/mutual fund investment.
  
  You will thank yourself in 30 years.
• thedynasty1998

  

  Why not borrow at least half? How old are you and who is giving you the money?
• derek bomar

  

  so what is it that you do that you would be able to afford this in cash, if you don't mind me asking. You usually don't see 1st time home buyers with that amount of $$$.
• ernest_t_bass

  

  derek bomar;1092818 wrote:so what is it that you do that you would be able to afford this in cash, if you don't mind me asking. You usually don't see 1st time home buyers with that amount of $$$.

  I have that much cash. You pay my salary. I'm rich, bitch!
• Wooball

  

  Heat fan, so probably drug money
• WebFire

  derek bomar;1092818 wrote:so what is it that you do that you would be able to afford this in cash, if you don't mind me asking. You usually don't see 1st time home buyers with that amount of $$$.

  Wondered the same. Not that it's our business. But maybe I could use the tips!
• jpake1

  

  Soon to be 25, as will the gf. I have a decent paying job for my age running a store, but that's half my income. I've done very well gambling(won HUGE on lbj to miami months before it was a thought and hit an eight team parlay). I PT very rich Naperville housewives-- 3k for 30 sessions, yes they buy it without hesitation. I work as a rep for ON for some bil paying. The gf and I run a lil profit on amazon. I've worked 65 hour weeks the past 2 years and saved almost everything. I don't pay for gas either and get to use that card to buy beer and random shit at shell. Hard work and luck I guess.
• ernest_t_bass

  

  jpake1;1095253 wrote:Soon to be 25, as will the gf. I have a decent paying job for my age running a store, but that's half my income. I've done very well gambling(won HUGE on lbj to miami months before it was a thought and hit an eight team parlay). I PT very rich Naperville housewives-- 3k for 30 sessions, yes they buy it without hesitation. I work as a rep for ON for some bil paying. The gf and I run a lil profit on amazon. I've worked 65 hour weeks the past 2 years and saved almost everything. I don't pay for gas either and get to use that card to buy beer and random shit at shell. Hard work and luck I guess.

  
  Luck. Knowing right people. Instructed to work hard.