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Thread: Anyone here had a home built before? (First Time Home Buyer Questions)

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    Anyone here had a home built before? (First Time Home Buyer Questions)

    I've recently set the goal to buy my first home by the end of next year (or have one built). I've also began searching for a part-time job to work 2-3 nights per week as well as on the weekends. This will help me save several thousand dollars over the next year or so for the down payment. I also arranged for money to be taken out of my paycheck (day job) and automatically transferred into my "home savings account". So, I've got the plan in place for the financial requirements. My long-term girlfriend is also saving toward our goal. Of course, I'll be going the FHA 30-year route which requires at least 3.5% down. I'd like to go beyond that, but there's no way I'll be able to avoid PMI by putting down 20%.

    What advice do you have? What things happened to you that were unexpected? Thankfully, one of my best friends is a mortgage lender. So, I'll have the honest approach and know that I'm getting the best deal/rate possible...rather than wondering if I'm getting taken advantage of by a lender that I don't know.

    Do you suggest buying ... or building? I've done a bit of research on builders and some really nice homes can be built in this area for a very manageable price. Another really good friend of mine builds homes for a living. We have had very preliminary talks about the possibility of me building rather than buying. He's becoming very influential in this!

    He recently built a home for his parents. I'll try to post pics of it in a few minutes.

    All in all ... I recently turned 30, and it's time to get out of an apartment!
    "Rounding Third and Heading for Home"

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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Quote Originally Posted by Grounds_Crew View Post
    I've recently set the goal to buy my first home by the end of next year (or have one built). I've also began searching for a part-time job to work 2-3 nights per week as well as on the weekends. This will help me save several thousand dollars over the next year or so for the down payment. I also arranged for money to be taken out of my paycheck (day job) and automatically transferred into my "home savings account". So, I've got the plan in place for the financial requirements. My long-term girlfriend is also saving toward our goal. Of course, I'll be going the FHA 30-year route which requires at least 3.5% down. I'd like to go beyond that, but there's no way I'll be able to avoid PMI by putting down 20%.

    What advice do you have? What things happened to you that were unexpected? Thankfully, one of my best friends is a mortgage lender. So, I'll have the honest approach and know that I'm getting the best deal/rate possible...rather than wondering if I'm getting taken advantage of by a lender that I don't know.

    Do you suggest buying ... or building? I've done a bit of research on builders and some really nice homes can be built in this area for a very manageable price. Another really good friend of mine builds homes for a living. We have had very preliminary talks about the possibility of me building rather than buying. He's becoming very influential in this!

    He recently built a home for his parents. I'll try to post pics of it in a few minutes.

    All in all ... I recently turned 30, and it's time to get out of an apartment!
    Well the home market has more inventory then buyers right now. I don't know if that will be the case 1 year from now, but you can get some decent deals on already built houses. Is your friend a custom home builder? I'm guessing that would be pretty expensive.
    One thing I'd advise is find two or three things you have to have, and go from there. Don't worry about the perfect house. Even if you have a "perfect" house built, there's something you'll want to change in 2 or 3 years anyway.
    When people say that I donít know what Iím talking about when it comes to sports or writing, I think: Man, you should see me in the rest of my life.
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Quote Originally Posted by Hoosier Red View Post
    Well the home market has more inventory then buyers right now. I don't know if that will be the case 1 year from now, but you can get some decent deals on already built houses. Is your friend a custom home builder? I'm guessing that would be pretty expensive.
    One thing I'd advise is find two or three things you have to have, and go from there. Don't worry about the perfect house. Even if you have a "perfect" house built, there's something you'll want to change in 2 or 3 years anyway.
    Very good point.
    "Rounding Third and Heading for Home"

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    CELEBRATION TIME RBA's Avatar
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Make sure you and your significant other have at least 2 years of steady employment.

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    Be the ball Roy Tucker's Avatar
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Spend money on space, not amenities. Dressing up a plain house is relatively cheap. Adding on to a small house is expensive.

    And don't go by what the bank says you can afford. Use your common sense. Don't get in over your head and be at best house poor and at worst foreclosed.

    Pay attention to the open sky

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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Quote Originally Posted by Roy Tucker View Post
    And don't go by what the bank says you can afford. Use your common sense. Don't get in over your head and be at best house poor and at worst foreclosed.
    This times 1000.
    When people say that I donít know what Iím talking about when it comes to sports or writing, I think: Man, you should see me in the rest of my life.
    ---Joe Posnanski

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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    I have both built and bought. Save yourself a million headache's, phone calls, and incidents by just buying a pre-existing house. I would never do it again. Builder's make a good chunk of money on new homes and the more you upgrade as the process goes on, the more they make. On larger, nicer homes, the cost to you, the buyer may be above what the house appraises for and then what do you do? The bank won't loan you the money if it doesn't appraise. Be careful. I've had good friends get into 6 figure lawsuits with builders and lose.
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    I'll likely go the route of buying an existing home. I was just curious to hear thoughts on having one built.

    I have plenty of time to make this happen. I'm just in the beginning stages right now and I'm trying my best to "do my homework".

    THanks for all of your input so far.
    "Rounding Third and Heading for Home"

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    My clutch is broken RichRed's Avatar
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Quote Originally Posted by Hoosier Red View Post
    This times 1000.
    + a million.

    When we got our house loan, the broker said we would've been approved for twice that amount. Well no wonder the real estate market is in the mess it's in, was the first thought I had.
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    First Time Caller SunDeck's Avatar
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Have your friend the mortgage broker run your ratios to tell you what you can actually afford, then decide on your price range. It's hugely important for you to establish your maximum monthly payment scenario (payment on your note, insurance, taxes). Once you have that, you can work on finding a place that fits into your parameters.

    I pay more attention to infrastructure than cosmetic problems. A kitchen can be repainted, but if the roof is bad and the electric looks like spaghetti at the breaker box, I'll pass. This has worked out pretty well for us- we buy houses that need sweat equity, stuff I can do like painting, new kitchen cabinets, non earth moving landscaping, etc. - homes that are passed over because the owners don't think to showcase the home. As long as it has good bones and I can visualize the end product, I'll give it a look. It's been a good plan; after years of slowly building equity, my mortgage payment is actually lower than it was on my first house, and we have twice the square footage. Be warned though, I've been doing this for fifteen years; don't convince yourself to buy a place like that if you're not handy.

    Additionally, realtors don't lie when they say "location, location, location", which applies not only in the macro sense, but at the micro level as well. Obviously, Hyde Park homes are more pricey, but also consider the location of a home relative to traffic, noise, etc. If you find a place you like, go there with a dog in the evening to see if it attracts a lot of barks in the neighborhood. If you're not a dog person, this is doubly important!
    There are a lot of intangibles like that- it helps to don a bit of a paranoid hat to keep yourself from getting too excited about one place in particular.

    Lastly, there are probably a lot of houses you can afford and which you will enjoy. Don't sucker yourself by falling in love with a house. Stay rational at all times. Here is a company that can help you do that. I had David Taylor look at a few homes for me. He's a hard nosed inspector, who will give you every reason not to buy a place.
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  12. #11
    Be the ball Roy Tucker's Avatar
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Quote Originally Posted by SunDeck View Post
    we buy houses that need sweat equity, stuff I can do like painting, new kitchen cabinets, non earth moving landscaping, etc. - homes that are passed over because the owners don't think to showcase the home. As long as it has good bones and I can visualize the end product, I'll give it a look.
    As as side note, this is very true and you can get yourself a good buy following this.

    This past winter, we sold my mother-in-laws house. Since it had been inhabited by 2 very senior-aged people, it needed some updating and sprucing up, but was a very nice home.

    But I swear, everyone watches too much HGTV or something. The buyer is always right, but people seemed almost offended that the knobs on the kitchen cabinets were dated or the wallpaper in the batroom was 80's-vintage. Nobody seemed to be able to get past that.

    After 2 months of no movement, we took $2K out of grandma's bank account and bought new carpeting, new paint, new knobs, new light fixtures, new flowers for the landscaping, etc etc and invested a months worth of weekend sweat equity (installing, scraping, painting, digging, etc.) in sprucing things up and getting it all fresh and modern and HGTV worthy.

    Before we were even done, we had 3 offers and ended up getting our asking price. If someone had given us a lowball offer prior to working our butts off, we'd probably had taken it.

    Pay attention to the open sky

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    Just The Big Picture macro's Avatar
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Quote Originally Posted by Roy Tucker View Post
    But I swear, everyone watches too much HGTV or something. The buyer is always right, but people seemed almost offended that the knobs on the kitchen cabinets were dated or the wallpaper in the batroom was 80's-vintage. Nobody seemed to be able to get past that.
    It's funny that you brought up HGTV, because I've often been amazed at how couples on the show House Hunters are ready to throw out perfectly good appliances and rip up flooring because they're not brand new and styled in the absolute latest trend, and I'm talking about stuff that's not all that old or dated.

    As for Grounds Crew's question, I'll agree with the others. You're always better off to buy an existing home. The challenge is often finding 1) what you want, 2) where you want it, and 3) at the price you're willing to pay. Getting all three of those is sometimes hard to do, and building is the only option toward getting all three.

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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    See if you qualify for NACA assistance. I had a good friend go through this process, and he ended up with a great pre-existing house and a very manageable payment. They specialize in middle-to-low income homebuyers with at-risk credit ratings, but if you're a first-time buyer, you might still qualify.

    The process is rigorous -- they do everything they can to verify that you can make your payments -- but the reward is a payment you can live with, plus 3.85% interest rate.


    BTW - they are a non-profit organization.

    https://www.naca.com/index_main.jsp
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    Don't buy the biggest house in the neighborhood.
    I was in the ORG once, best 6 months of my life.

  16. #15
    Tired of talk. Win! Joseph's Avatar
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    Re: Anyone here had a home built before? (First Time Home Buyer Questions)

    I'll be the contrarian here.

    Build.

    I built my first home [served as GC and designed it myself] and my second home I bought 'used'. If you have a friend who is a builder already you may luck out a bit and get to use him or get his input.

    Don't go the cheap route and go to one of those builders who builds the same house over and over in a neighborhood, get one who can build what you want. As others have said, go more for size than amenities because you can change the skin easier than the bones.

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