OT: home purchase advice?

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Steve-o

Steve-o

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Any of you guys real estate experts?

My girlfriend and I are tired of throwing away a grand a month with nothing to show for it, so we're looking to buy our first home. We're currently shopping for lenders, and we're looking to get the most bang for our buck, so we're looking at the foreclosure market.

Anyone have any tips?
 
I looked into foreclosures. Most of them are pieces of crap, or have been totally ruined inside. But I am sure that there are some nice ones, too.

I think that with foreclosures, you have to have the money upfront, so wither have a loan or some other funds ready. The ones we were looking at were up for bids, so top bidder gets the house.

We were tired of paying rent, too, but houses in my area have gone up 500% in the last 3 years. Houses used to go for 90K but now even a "needs TLC, 1200 sq ft" is 350K.

We found a country town in Fresno County, and my husband's job is just so happening to be putting a yard in Fresno. So we found a piece of land and are going to put a modular on it. Everything is going to cost about 200k. The mortgage will be less than my rent.

Modulars are very well made these days. I couldn't tell a difference once I stepped inside. That's what we did. We got a land-home package through the modular company, and they only wanted 5 percent down. It would have been 9k, but they had a deal that they would match 2x what we put down, so for 3k down we got a loan for a 2000 sq ft home that we pick all the colors and options on, and a 2.5 acre parcel that is 100% usable. It was the best thing for us, seeing how we want to get out of this area, anyway. (they put a new University of Ca, so everything is getting ridiculous.)

SO, that is any advice I could give you. I am very happy with what we did.
 
Thanks!

We do have the funding basically set. We just have to decide which lender's offer we want to go with. We're looking at R.E.O. properties, to reduce the hassle. The housing bubble around here seems to have burst. We were driving around looking at rentals, and saw streets with 4 houses per block for sale, and nothing's moving. So we could be entering a nice buyer's market.
 
Hi Steve,

If you are looking in RI, MA or CT I can help you out as I work for a mortgage broker licensed in those states. Or if looking in another state want to send me the good faith estimate numbers so I can tell you if you're getting screwed or not I'll be happy to look at them for you.

I can tell you CA is one of the most inflated markets in the country value-wise, and a grand a month payment won't get you much in most of that state.

Yes this year is a buyers market. 01-03 there were huge gains in value across the country, 04 those gains slowed substantially, and 05 the market became flat. This year as rates are going up values are coming down, and sellers often have big dollar signs in their eyes and are trying to get 30-50k more than what the properties will appriase for. If it won't appraise, no lender will lend any amount higher than the appriased value so be careful. This has created a buyers market for the first time in years.

Contact me by pm i f you want my phone # we can talk.
 
Biggest challenge I see is that you're in SoCal. It's hard to imagine a Real Estate market more screwed-up than in the northeast, but LA and SF may be it.

If the market there is like here, distance = affordability. If you can deal with living in the "outer burbs" it's prabably more affordable.
 
It's depressing, after paying $1500 rent for 5 years with nothing to show for it, the wife and I decided it's time to make a change. In addition to looking for some new jobs with higher income, I'm also investigating a couple of possiblities that would lead me back down South.

So, on a whim, the wife and I were looking at housing around the suburbs of Memphis near the MS state line. It got rather depressing. For the price of a decent 2br condo in Canton, or more likely Stoughton, I can get a 4br 2bath house around 3000sq ft. Problem is, given the choice, I'd rather take the condo and stick around this area.
 
Dude, you do know that Peg is a broker right? She is pretty good too from what I gather, give her a jingle, or just talk to her next Sat at the DDP. She'll be a wealth of knowledge for you.

Ooops!!! wrong Steve, sorry. Anyway she might have some advice for you.
 
If you are looking in the Boston / New England area it is a buyers market right now and will be for the forseeable future.

There are many heavily overpriced properties in this area, and you have to be very careful. The last couple sales I did loans for had listing histories of about 6 months and the asking price had started 40-50k higher in both cases.

Be glad to help you or anyone on the board with a mortgage, and I'll have to figure out a special for all Planeteers. Maybe reimbursement for the appriasal at closing or something like that.
 
Moebius said:
It's depressing, after paying $1500 rent for 5 years with nothing to show for it, the wife and I decided it's time to make a change. In addition to looking for some new jobs with higher income, I'm also investigating a couple of possiblities that would lead me back down South.

So, on a whim, the wife and I were looking at housing around the suburbs of Memphis near the MS state line. It got rather depressing. For the price of a decent 2br condo in Canton, or more likely Stoughton, I can get a 4br 2bath house around 3000sq ft. Problem is, given the choice, I'd rather take the condo and stick around this area.
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the canton/stoughton area is way overpriced but with the over abundance of Condos in the area and with the difficulty selling them for some of the larger named builders look for condo prices to drop even more than they have soon. One builder has greatly over extended himself and is planning a rather large project and will need to "rid" himself of units to build up the cash flow required for his new project.

I have looked to move about 20 miles south recently to split the commute for my wife and myself, and find the amount of house there compared to Canton is quite a difference. No matter where you look deals can be found it is just being ready to jump on them as they come to you is the key. The reason I may not move is the schools in the towns I looked at are not up to par and I expect a lot of overrides shortly in those areas to build schools to meet the new demand
 
More appropriate reply:
Actually if you believe the market is in a down turn, this could be the worse time to buy. If you are already renting then you are in a position to wait out the market. If you buy a house in the beginning of a down turn you may end up holding the bag with negative equity. Good luck
 
runnerone said:
More appropriate reply:
Actually if you believe the market is in a down turn, this could be the worse time to buy. If you are already renting then you are in a position to wait out the market. If you buy a house in the beginning of a down turn you may end up holding the bag with negative equity. Good luck
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Good point.

I moved to Rhode Island in 2000. At that point, you could get a decent house for probably about $150-200k. Now, you can't touch anything for under $250k. Hell, converted apartments that are now selling as condos are going for $175k and up.

I hate paying rent, and not getting anything out of the deal, but I can't see sinking a 30-year mortgage and $1500+ a month into a place valued at $300k. With my luck, the prices WILL drop for the first time in years, LOL. So, we continue to rent. It sucks, 'cause I'm tired of being told how many cars I can park and how many animals I can have and neighbors making noise, etc.,.

I really have no idea how people do it nowadays. I mean, sure, I don't make a ton of money, but there are people out there who make less than I do and they have kids AND a mortgage (and we have neither). Is everyone mortgaging their future, like that commercial with the smiling guy on the ridable mower who's saying through gritted teeth, "I'm in debt up to my eyeballs, somebody help me"?

As has been pointed out, you CAN get a cheap house... if you want to live in the middle of Podunk, Kansas (or Oklahoma, or some other such place). There's a reason houses are cheap there: no one wants to live there, and jobs pay crap. In areas like New England and California, jobs pay better but the cost of living is through the roof.

My parents live in Florida, and even down there it's going crazy. Little apartment-condos that used to sell for literally $20k a few years ago are now selling for $100+k.

(Drifting off topic... It makes me wonder what's going to happen in this country. The signs are bad. Housing is through the roof (pardon the pun), health care sucks, the government has a bazillion-dollar debt, Social Security's hanging on by a thread, and we're outsourcing jobs like crazy to the point where be barely make anything in America any more. Did you know that doctors' offices now outsource their medical transcriptions to freakin' Bangalore India? Did you read about how they're thinking of outsourcing the DRIVE-THROUGH WINDOW at fast food places--that your order would be taken by someone in another country? What, are we too stupid now to even press the buttons with the pictures on them over here?!? Frightening...)
 
Like JHeavner, I was in your shoes about 12 years ago and looked into modular homes. I wondered about the stigma, but it just made so much sense that I went for it and have no regrets.

You could do worse than to check your local yellow pages under modular homes or under contractors and find one that works with the factory and is expert in doing the site prep etc.

Go to a local home show and check out the videos of the process from various manufacturers and compare the specs they use with "stick builders". You will find they are superior in most cases in terms of materials. The homes are beautiful.

Nobody that walks into my house has any idea it came from a factory. You can save yourself substantial coin and get a nice house to boot.

In my case all I had to cough up was a down payment, which was only 6000 bucks. I wrote more than that off my taxes last year from the mortgage interest and you can write off "points" as well in the first year.

My home is worth about double what I paid for it 11 years ago.
 
Hawg73 said:
Like JHeavner, I was in your shoes about 12 years ago and looked into modular homes. I wondered about the stigma, but it just made so much sense that I went for it and have no regrets.

You could do worse than to check your local yellow pages under modular homes or under contractors and find one that works with the factory and is expert in doing the site prep etc.

Go to a local home show and check out the videos of the process from various manufacturers and compare the specs they use with "stick builders". You will find they are superior in most cases in terms of materials. The homes are beautiful.

Nobody that walks into my house has any idea it came from a factory. You can save yourself substantial coin and get a nice house to boot.

In my case all I had to cough up was a down payment, which was only 6000 bucks. I wrote more than that off my taxes last year from the mortgage interest and you can write off "points" as well in the first year.

My home is worth about double what I paid for it 11 years ago.
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Way back in another lifetime (1990-1992ish, I think), I lived in a double-wide up in Peabody off Route 1, just where it splits back into 95. It's just past the Golden Banana, next to the defunct Sir John Motel. :D There's a little trailer park there, and if you drive by and look to your right, just about dead-center in the middle of the hill you can see a nice double-wide. That was the one we had.

Like most kids, I'd heard the jokes about trailer-trash. When I walked into this place, I couldn't believe it was a double-wide trailer. When you slap two of them back to back, they look just like a house. The parlor was huge, the kitchen was roomy, I had my own bathroom, there was a front door and a back door, we had a nice driveway, etc.,.

From what I've seen of the modular homes nowadays, they're even better looking than double-wides. John Ratzenberger's "Made In America" went to one of the companies, and they showed pictures of the finished houses, and they looked indistinguishable from a "built" house.
 
I've been very fortunate in my home ownership life. My company moved me twice in a 6 year span ('85 and late '90) and covered a tremendous amount of the extraneous expenses (points, fees, moving costs, realtor fees, etc) both times. This allowed us to get homes we otherwise couldn't have afforded. Now, in the 15 years since we've lived in our current home, it's tripled in value. This has allowed us to put our kids through college (using home equity) and still be able to pay the resulting monthly mortgage. I don't sweat the idea of always having a mortgage payment. It's the price to pay for having a place to call our own.

There's no such thing as cheap housing anymore. Anything new being built is a mini-mansion or bigger. We've got a development going up near us with 75 houses starting at 650K. Some, depending on style and extras, are pushing $1Mil. I can't fathom that many people can afford houses that expensive. The first 1/3 of the houses were sold fairly quick last year. The next 2/3 are still being built, many with signs that say they're still looking for buyers.

The Florida spike in prices came within the last 3 years. We were in Palm Beach visiting a few years ago. Homes similar to the ones described above were going for $250-300K. One year later, they were going for 500K+. What was happening was that speculators (gamblers??) were taking out 40-50 year mortgages on homes they still couldn't afford. They were hoping to turn around in a year and sell at a good profit. That worked for the first batch that bought. But, the market reached it's saturation point and prices started plateauing or dropping. There's been a fair amount of bankruptcies down there recently.

I'm just glad that I was able to purchase at a time when prices were still reasonable. I'm not really sure I could afford to buy my home today.
 
the homes are built in a climate controlled environment, the design and applications have changed drastically and the homes being built today are as good as any stick built, the only drawback, if you want to call it that, is the lack of changes that you can make and pay for on a stick build.

Many modulars today have a very open floor plan and once the foundation in pured and cured a house is in place in a very short period of time.

One I am aware of started Thursday with demo of the old house, they are pouring the foundation today and will place the house on the foundation on Friday. His move in is expected to take place June 1st. not bad, the permitting took longer than the construction of the delivered home

If you do go modular, find one on-line that will give you the name of local contractors they have worked with. you can inspect the workmanship of the contractor this way and choose from their list or find one yourself
 
I made several changes to the design of my house and added a number of upgrades as well, including natural siding as opposed to vinyl and a bunch of others.

My understanding is that the industry is moving even more in a direction of buyer's choice in design.

I convinced my sister to demolish the house she lived in and build a modular on the land and it is absolutely beautiful. It was probably the worst house in the neighborhood and is now arguably the best. The neighbors are jealous, because all of the homes are these little government contract houses built for a local naval air station that cannot be easily upgraded and she scrapped the whole thing and got a hell of a house in the process.

The day she took possession of it, she made herself about 200K.

I'm not saying she couldn't have done the same thing with a stick built, but from demolition to move in was a vastly shorter time frame and would have cost substantially more. She is convinced that it was the best way to go and has forgotten that the whole thing was originally my idea. :shrug:
 
runnerone said:
More appropriate reply:
Actually if you believe the market is in a down turn, this could be the worse time to buy. If you are already renting then you are in a position to wait out the market. If you buy a house in the beginning of a down turn you may end up holding the bag with negative equity. Good luck
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This is something we've been keeping a close eye on. The house next to me has now been on market for over a year, and price has dropped from $569k to $489k (still well outside of my range). If it looks like the market's going to keep dropping past this year, we plan on re-assessing the situation. Right now, we'd like to do something by year's end. Of course this is another reason we're cosidering the South option. The area around Collierville, TN is one of the fastest growing in the state, and house prices there are starting to ride up. Heck, my parents' house in Cordova (nearby) which they bought for $109k and sold for $149k a few years ago is now sitting around $199k.

Of course, this would all be much easier if I could just win the lottery. :D
 
5 - 10 years ago I would design one maybe 2 lots a year for modular homes. The amount now is up to 5-10 a year and growing. New builders of these homes have surfaced and the best thing for the consumer is choice, so you can now get more options added to the house, you just need to do it prior to the construction, with a stick build you can alter things as the house is being built by simple walking through it and realizing this or that is not what you thought.


both homes have good and bad points but the Modular home is gaining rapidly on the stick built. With the options offered you can get everything you want in the Modular
 
Moebius said:
This is something we've been keeping a close eye on. The house next to me has now been on market for over a year, and price has dropped from $569k to $489k (still well outside of my range). If it looks like the market's going to keep dropping past this year, we plan on re-assessing the situation. Right now, we'd like to do something by year's end. Of course this is another reason we're cosidering the South option. The area around Collierville, TN is one of the fastest growing in the state, and house prices there are starting to ride up. Heck, my parents' house in Cordova (nearby) which they bought for $109k and sold for $149k a few years ago is now sitting around $199k.

Of course, this would all be much easier if I could just win the lottery. :D
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I WILL WIN THE LOTTERY FIRST!@

Yeah, we're totally keeping an eye on all of this as it develops. We've decided to only buy if we get lucky in the foreclosure market and get something super cheap. If not, we're content to keep renting for now and watch prices fall.

Thanks for all your input! :D
 
Moebius said:
The house next to me has now been on market for over a year, and price has dropped from $569k to $489k (still well outside of my range). If it looks like the market's going to keep dropping past this year, we plan on re-assessing the situation.
Click to expand...

One of the main things driving the drops in value is mortgage rates rising. As long as they keep going up values are likely to keep dropping.
 
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