Buying a home: advice for a youngster.

[lester]

So I am just about ready to get out of college and am tired of throwing away money away on rent. I'm seriously considering getting a cheaper house in the area and fixing it up. While looking at houses for sale, I realized that home builders in my area are apparently scrambling to get work and offering modest 2000ish sq ft new homes to be built in the low $100,000 range. Land isn't too hard to come by and rather affordable and all in all I calculated about $150,000 after everything is said and done on buying the land and building. $150,000 is about the area where I am looking to buy something and just about anything I can find in that range is rather busted looking or a decent home in a bad place in town. My bank pre-qualified me for all the money I would need in this price range and a little extra if I want. I'm leaning more towards trying to get the land and build so I had a few questions for the guys who have "been there and done that".
1. Is the process of buying land that is already zoned residential as easy as it seems? Are there hidden costs aside from the price of the land?
2. Are these cheaper priced homebuilders worth it? The ones I've seen all have 30+ year businesses and model homes, buildings...etc.
3. Has anyone done this process and how did it turn out?
4. Is it possible to do all of the work yourself and skip the Realtor?
4. Should I just look for something already built for my first home?
5. Should I just rent until I'm older so I'll know exactly what I'll want?
6. Should I just move back in with Mom and Dad? =free.
I have many options...I just hate the idea of throwing money away on rent every month. Give a young gun some "pearls of wisdom". Thanks in advance. By the way, I have no kids and not planning on it for years. Also not married, but have girlfriend who might come along for the ride...so basically this can be done however my budget allows...a full-scale man cave is a possibility.......

 

[oops!]

Re: Buying a home: advice for a youngster.

a couple of things......

id get a realitor.....(lots of reasons why)

i buy one that just needs "lipstick" and has a suite in the basement.
id give it lipstick and live in the basment....and rent the top half....

in a few years....you will get to know what you want in a house, as your family grows...so will your needs.....so a starter home is what you want.

i bought some land....bought a "show home" and moved the home on to the land....then built another floor under the house, plus a 2 car garage.

the house was 50,000....land 108,000....the cost to build was approx 100,000

nice place....i put a 25 foot vertical and 50 foot long water fall in the back yard.......(it was on the side of a mountain....so yard space was allmost vertical and needed "somthing")

sold it for 469, 000. 2 years later........over all a good investment. the sooner you start....the better off you will be......just get a pre nup if the gf moves in !

 

[oops!]

Re: Buying a home: advice for a youngster.

btw.....when i built the house...the general contractor's brother passed away three weeks into the job....there was no way i could get another one, as our area was booming and all the gc's were at least 8 months booked.

so i did it my self.
i did a lot of the finishing construction my self.......un less you have the time and pocket money.....dont build....buy and fix.

when you know a bit more about houses and construction in's and outs, then build if you want.....but if you build now....youll be grey by the time your 27

 

[xxxflhrci]

Re: Buying a home: advice for a youngster.

I'm personally a fan of older homes built in the 1955-1965 or so range. You usually get a more solid house underneath...better materials and craftsmanship, IMO. I looked for a home with the things I wanted, plus updates....new plumbing, new roof, new heat pump, and so on. It took a little shopping but I found it. I've lived in my house 15 years and spent next to nothing on it.

IMO, you are wise to buy young. I did. I bought when I was 24. Now at 40, my house is paid for and has been for two years.

 

[timdan94]

Re: Buying a home: advice for a youngster.

I was just in the same position you are now. If you can live at home for a little while and pay minimal rent thats what I'd do. Put the money away that you'd be spending on rent and either pay down loans and bills and put money in the bank so when you do want to buy you have a good sized down payment. I moved out of my parents house and I actually regret it because I only make enough to cover the bills with not much else.

 

[JRJ]

Re: Buying a home: advice for a youngster.

So I am just about ready to get out of college and am tired of throwing away money away on rent. I'm seriously considering getting a cheaper house in the area and fixing it up. While looking at houses for sale, I realized that home builders in my area are apparently scrambling to get work and offering modest 2000ish sq ft new homes to be built in the low $100,000 range. Land isn't too hard to come by and rather affordable and all in all I calculated about $150,000 after everything is said and done on buying the land and building. $150,000 is about the area where I am looking to buy something and just about anything I can find in that range is rather busted looking or a decent home in a bad place in town. My bank pre-qualified me for all the money I would need in this price range and a little extra if I want. I'm leaning more towards trying to get the land and build so I had a few questions for the guys who have "been there and done that".
1. Is the process of buying land that is already zoned residential as easy as it seems? Are there hidden costs aside from the price of the land?

Price of utility and sewer hookup.

2. Are these cheaper priced homebuilders worth it? The ones I've seen all have 30+ year businesses and model homes, buildings...etc.

Some are and some aren't. Have everything in writing and don't assume anything. Don't overspend for the neighborhood. Don't get carried away on custom changes. A new home should come with a years warranty.

3. Has anyone done this process and how did it turn out?

Built two homes, and they were very good to us, plus a lot of fun.

4. Is it possible to do all of the work yourself and skip the Realtor?

Depends, but be careful buying a lot split from a private party.

4. Should I just look for something already built for my first home?

Consider everything available. Having a home built is a lot of work, even with a really good contractor. Landscaping a new home can be a real chore also. I prefer to buy homes 5 years old or less, and I'm not into fixers.

5. Should I just rent until I'm older so I'll know exactly what I'll want?

Not necessary. Good time to buy right now, and your first home probably won't be your last.

6. Should I just move back in with Mom and Dad? =free.

I've seen this, but rarely works for long.
As for your girlfriend, be careful. My youngest son bought a house from a guy whose girlfriend got co-mingled in somehow. When they split up, he had to sell his house to pay her off.

I have many options...I just hate the idea of throwing money away on rent every month. Give a young gun some "pearls of wisdom". Thanks in advance. By the way, I have no kids and not planning on it for years. Also not married, but have girlfriend who might come along for the ride...so basically this can be done however my budget allows...a full-scale man cave is a possibility.......

Hope this helps. Enjoy being a homeowner.

 

[aspeck]

Re: Buying a home: advice for a youngster.

Interest is CHEAP right now, housing market is depressed ... you should be able to get more value from a pre-built home than a new build because the price of materials hasn't dropped, but overall house prices have dropped. Get a depressed valued house that needs minor repair (paint, maybe new roof, restore flooring or new carpet, etc) and do it as you have the time and money. When you are ready to move on up your house will be fixed up, nearly paid off, and worth more than when you bought it.

Remember, the market will turn around eventually! It always has and it always will. It might take some time, but it will.

 

[tashasdaddy]

Re: Buying a home: advice for a youngster.

being a retired general contractor, and realtor. my advice is in buying land, get yourself a good real estate attorney, to right the purchase agreement, and do the title search, and handle the "closing" of the transaction. the problem with financing raw land, until you are ready for your construction loan, and building the house, is financial institutions, want atleast 40% down on raw land. at the time you get your construction loan, that equity is considered down payment on the house (usually), and the balance of the land loan is paid off by the construction loan. during the time of construction, you will be paying interest on the construction loan. when the house passes all inspections, government, and financial. the construction loan is converted to the permanent mortage for the house and land.

also you have to look at deed restrictions, and zoning restrictions, and city, county, home owner association restrictions, before you buy. ( no boats, camper, mud buggy's store on property) also they may have a restiction, that you have to build a home larger than you plan. square foot restrictions.

if i were to do it over again, i would buy a several acres.

find or design a floor plan, and elevation, that i can build what i need now, and then in the future, be able to upgrade, and add additional living space.

say a 2 car garage, 2 bedroom, 1 or 1 1/2 baths, large great room. all of it designed for easy addition, say for 2 more bedrooms, and another bath, etc. this get you on the ground floor, and then as your need grow, your residence can also.

i have also built for starters, a 30x30 2 story, bottom floor, was all garage, 2nd was living area, then when they needed it, they finished off the bottom level as living space, and built another garage.

 

[tashasdaddy]

Re: Buying a home: advice for a youngster.

i will say i love older historic homes, but, they can get into really big money, when it comes to updating, and restoration. the cost of updating is usually almost double, than new construction. and then you never know what unseen, problems you run into. old termite or other infestations problems. upgrading systems to meet the code now. etc.

 

[gonefishie]

Re: Buying a home: advice for a youngster.

Depends on where you are, most cities have tons of forclosed bank owned property that goes for cheap. If you do a search on forclosure home for sales you would find anything from 5 grand to a million bucks or more. In my area, there are new subdivisions that the builder/developer went under and the brand new houses that are normally 150k and up were going and gone for 70k.

 

[tashasdaddy]

Re: Buying a home: advice for a youngster.

very true. and a fixed rate mortage is a definate, the ARM's are what got us into the economic mess.

 

[ezmobee]

Re: Buying a home: advice for a youngster.

Here's what I learned.....don't buy a house that's attached to other houses. The neighbors are a pain and the houses don't appreciate much. In many ways you're better off renting. I know this is not universally true but I think if you're looking for a fixer-upper you're better off with a fully detached house. You'll be able to better capitalize on your improvements.

 

[thurps]

Re: Buying a home: advice for a youngster.

Patience, patience, patience. The market isn?t even close to the bottom yet. Better to gather a little cash so that when the bottom is closer, you can make an even better deal. After all in this economy you don?t even know if you will be working six months from now.

 

[lester]

Re: Buying a home: advice for a youngster.

Thanks for all of advice. I found what appears to be a decent deal on some land that just happens to be in the area I want to be in. The land is on the smaller side at 17,324 sq ft, but is on the market for $15000. The land is zoned for any single family detached residence three stories and under with water, electricity, gas, and cable at the street. It also doesn't require a paved driveway, curb at the street, or gutters...all pluses for a cheap starter home. The cons: it isn't cleared, thick trees and brush all over the whole area. I am toying with the idea of clearing it myself(along with a few of my buddies). I did landscaping work for 5 years and am familiar with removing a few trees... but not 100. My parents have offered to let me live for free at their place if I wanted to do this, so I would have all the time I needed and no mortgage as I can just buy this land outright. Any opinions? TD, you used to be a contractor...how does it sound? I do like the idea of building very small at first with the possibility to expand if need be. I appreciate anything you more experienced guys can offer me. By the way, you can have a boat in the yard here I was curious about the new home building process...if I pay the extra money for a lot that is already cleared with grass and everything, won't the builders tear it up anyways? Is there any real advantage to paying more than double for a cleared lot aside from the obvious brush and tree removal? Thanks again.

 

[gonefishie]

Re: Buying a home: advice for a youngster.

You must be really determined on building a house.

 

[aspeck]

Re: Buying a home: advice for a youngster.

Yep, builders and earth moving equipment would tear up a manicured lot, so might as well wait and landscape it AFTER the work is completed.

Starting small and building so you can add on is a plus. You need to find a design you like that can be done in phases ... last thing you want is a house that looks like it was pieced together.

How much building knowledge do you have? Enough that you would like to, or could do, some of the work? Living at home free while saving money to build and actually building are good things.

If this is where you want to be, then go for it (since it sounds like this is what your REALLY want to do). You gave the sq footage of the lot, but what are the dimensions? That will also make a difference in what you can build.

Start getting your wish list together and then see what you can do and afford ...

 

[JRJ]

Re: Buying a home: advice for a youngster.

First, the lot sounds good to me. I recommend thinking before you clear all the vegetation. Zero scape is my idea of a yard now. Just get rid of enough brush to pad the lot. Living with your folks and doing as much work yourself as you can will really payoff. We had one framed in and finished it ourselves as we could afford it. No house payments for over 20 years now, and in second home after that one. Real-estate bubble of course helped us. Good luck.

 

[jsfinn]

Re: Buying a home: advice for a youngster.

My Advice?

- Have a good job with money in the bank and no bills before you buy a house. People tend to get attached to their house and if you can't afford it after you've already moved in, you're going to have to walk away from an emotional attachment and that's going to be really hard to do.
- If you can afford it (which if you're paying rent, you probably can), do it.
- I'd buy a used house and fix it up. I think you'll find that in a few years your wants and needs change some. Build that house... but live in a starter house first to learn what you really want.
- Make sure you have money left over. You'll be buying things like tools, fixtures, a lawn mower in the spring, and probably a new expensive TV to hang on your new wall. Also, your car won't last forever, so make sure you can afford the repair bill on it, too.
- Think about getting a roommate. That could be a really nice way of having a big chunk of your mortgage paid for you.

I say go for it. It's a big commitment but you'll be glad you did it. Post pictures of whatever you end up with!

 

[Beefer]

Re: Buying a home: advice for a youngster.

I didn't real all the posts, so forgive me if this repeats.

Use a realtor whichever way you go if you buy, as oops said, numerous reasons

I would by a used house. Market is down, interest is down. Buy low, sell high. $50 /sq ft for a new home is cheap. Almost too cheap, but that also depends on the area you're buying in. Sounds like it'll be a Home Depot house, which is just too cheap for me.

Whether new or 'used', spend the $$$ and get it inspected, inspected, and inspected by a licensed/certified Home Inspector. I would advise using ASHI or NAHI inspectors (find one at www.ashi.org). I don't recommend an inspector with a NACHI certification, as there is a pig, a dog, and a 7 year old that were certified by them.

Living rent free with mom & dad sounds good, but in 3 yrs or so when you decide to move out, the same home will be drastically more expensive. Savings negated in the long run.

Find a 'starter' home in a good/decent or upcoming area in your town. Starter homes are the price range you are looking for. From an investment standpoint, a 3/2/2 home have a good growth in value, as they suit more future buyer's needs. A 2/2/1 would be a lot less money, but your $ won't grow, and it'll be more difficult to sell when the time comes.

And remember, owning a home is a second job, and proper maintenance will most likely be required regularly to keep it looking nice, and operating properly.

I could go on and on, but I won't. Go buy a house, and live the American Dream!

 

[avenger79]

Re: Buying a home: advice for a youngster.

I'm going to throw this out there even though I usually get hated by everyone for it. Unless you're paying cash for the house the only difference between buying or renting is instead of "throwing away" rent money you are "throwing away" interest money. The big tax break they speak of, remember it's a small percentage of taxes and interest.

buy a house because you want one, or want privacy, or want whatever but not for the money, you're still throwing away money.

as for the making money on it thing. add up the payments (check written - not the neat little principal payment) times the number of months in a home and then subtract the selling price. Very few people actually make money on a house. The bank does, the realtor does, and the contractor does. If you can't do one of those things yourself you're not in the group that will make the money.

Just my thoughts. I recently purchased my first home. It costs a fortune, there is maintainence, updates, wanna do's, taxes, lawn care etc. I spent 14 years in an apt. Had tons of extra cash took lots af vacations and never had to worry about upkeep and the rest of it. Your young, rent now and enjoy yourself for awhile before getting into the trap of home ownership.

Think I'm wrong talk to a homeowner, ask how many weekends they spend working on the house/yard/garage etc. Ask how many vacations they have taken (out of state). Ask how many vacation days they have taken to work on the house/yard/garage etc. Look at the vehicles they drive. I like my way, because while renting I saved up a ton of money. I still get to drive decent cars and go some places for vacation.

Just random thoughts.