In the market for a home with rates being as low as they are. However, sellers believe they are on goldmines due to the market rebuild in Michigan. Asking prices are 3 times what they were 5 years ago. What words of wisdom do you have regarding whether to buy now, how to buy, tips, what to look for, etc.?

I wouldn't buy into a market that's up 300% in that short of a time, IMO.

Skip. Wait for the crash. Either buy really old and cheap, with the full knowledge you're going to be in it a lot to fix it, or buy newish and expensive, exactly as you want.

Never ever ever fall in love with a potential house.  You make walking away from a bad deal hard.

Find an inspector that you trust.

Make a list of criteria that the house must meet, like 3 bed 2 bath, eat in kitchen, 2 car garage etc.

A list of things that you'd like it to have but not deal breakers, fenced in backyard, finished basement, shop etc.

And then things that are icing on the cake if it has it.

Find someone you trust who will give you objective opinions on what you're about to purchase.

Shop around for the best interest rate, make banks compete.

ETA: Also take a good look at the lot.  How does it drain, is it at the bottom of hill, or the top.  Walk potential neighborhoods and see what kinds of people live there.  Maybe even try and meet the next door neighbors of of the potential house.  They might be willing to share things about the house and current owner that your
realtor won't.

Don't buy right now, never buy when the home prices are advantaged towards sellers. Rent and save until it's in your favor.

Hire a buying agent.

Don't buy a home looking at it as an investment; buy it because you like it and want to live there.  If you're buying a fixer-upper, don't overestimate your time and/or abilities, and be prepared for contingencies.  Be prepared to drop 20% so you don't have to pay PMI.  Have another 10-15% above and beyond your downpayment for closing costs and unexpected costs after you move in.

Location, location, location.

1.  Remember that no matter how much you like a house, there are plenty of others to choose from.  Do not hesitate to walk if the sellers aren't willing to meet your price.

2.  Do not be afraid to make an offer that is significantly lower than the seller's asking price.  I wouldn't lowball just to see what would happen, but if I thought they were significantly overpriced, I'd make an offer more in line with what I thought the home was worth.  Pay no heed to anyone saying that lowballing is bad, because it might insult the seller.  Who gives a shit if it does?  Real estate is not a game that should be played by people who let their emotions make their choices for them.  Make what you think is a fair offer.  They'll either take it, counter, or won't take it.  Any of these outcomes is perfectly fine.

3.  Find a good home inspector.  Kind of tough to know who is good and who isn't.  Ask friends.

4.  Find a good pest inspector.  Nothing sucks ass worse than buying a place then finding it infested.  If you do use an inspector and he does shoddy work, incomplete work, or any other shenanigans, don't be afraid to tell him to fuck right off and get someone else.

5.  Make damn sure you find out the age of the major appliances (A/C, furnace, fridge, etc).  I'm not saying to avoid buying a house with old appliances that are likely to need replacement soon, but be informed about what you're buying and budget money to deal with those issues if they are impending.

6.  Look for signs of water damage.  If you find any, the sellers either need to fix it before closing, or they need to come off their asking price enough to cover repairs and any mold remediation that would be needed.  Inspector should find this, but remember you are responsible for the home once you buy it, so it's your due diligence to look for yourself as well.

7.  If housing prices in your area have risen as hard and fast as you say, I'd be inclined to wait a while.  There will probably be a correction at some point.

8.  Try to find a house in a neighborhood with good schools.  Don't buy a house in a neighborhood where crime is a daily occurrence or shooting people is the official sport.

9.  I don't know what your budget is.  If you make a lot of money, consider new construction.  You can get more of what you want that way, though it comes at a premium.

My dad's advice for me:

"You don't buy the house, you buy the neighborhood."

A house can always be improved upon and upgraded.

If you have the nicest house in a shit neighborhood.....you still live in a shit neighborhood.

I'm interested in the replies here as well. We are looking to buy a house but the real estate here in SoCal is ridiculously expensive

Wait until after the State of the Union speech.......


Never know....he may start promising free homes.......

Don't fall in love with a house, but do watch it over time. If you're interested and are still looking, keep any house you said you'd buy in mind and check in on it online every few weeks. This will show you over time and from looking at other potential house if you are THAT interested in it or not.

Also, it can really payoff for you. We recently were doing this with a house we looked at around 6 months ago and started to negotiate but they were being hard-asses and we walked away. Wife watched it online every now and then and realized it was de-listed. We found out through friends in their neighborhood that they fired their real estate guy, let the contract lapse and were going to get a new one.

We stepped in with 6-7% more buying power than we had 6 months ago, instantly as there was a small gap where there was no real estate agent. Since it had been on the market a while, now less the 6% realtor fee, we got it for a good amount less than our initial offer 6+ months ago.

My best tip is use a realtor.  It may sound stupid but they know the market better than you ever will, and their connections can really make a difference

at least learn the correct way to fix things, even if you decide to pay someone to do it, to make sure a) its done right and b) you're not getting screwed over.  

that said, its a wonderful thing knowing that this place is your very own, and nobody can tell you what you can do with it.  this is also a double edged sword and why i passed on a very nice place when looking for my first home that was painstakingly remodeled in the southwestern style.

this. and go in letting the agent know EXACTLY what you are looking for. like someone above said, you need to know what your deal breakers are and let the agent know this.

I'm going through it right now...  I close on Jan. 30th.  Be leary of any real estate agent.  There are some good ones out there, but a whole bunch of shitty ones too!  Question everything. Don't get emotionally attached.  I can't say enough about this one...  I had to chill my wife the fuck out a couple times, because she was willing to "overlook" some fucked up things because "she really loooovvvvveeedd the house".  Fuck that.  Go to the home inspection and follow that motherfucker around.  If you see him miss something, point it out.  If you want to buy a fixer-upper, that's fine.  But if your looking to buy a well maintained house, call them out on the shit.  I guess the people I'm buying from would rather drink and lay up in the hot tub every fuckin' weekend instead of fixing their shit...  Piddly shit, like sprinkler heads not working, loose light switch plates, insulation off of air conditioning line, etc.

This!  It is the 3 most important things about buying a home.

Oh, and always buy on the lower end of the neighborhood home prices, not the high end.

I really wasn't trying to be funny, it seriously is and its something I made a mistake on once.

The housing bubble hasn't been allowed to deflate fully.  Keep your liquidity and buy after the dollar dies.  Heck, you can probably pick up homes that are in arrears for tax liens.

This is all great input, thank you. What are some things to lookout for initially upon walk through?

Don't laugh - water pressure in the showers and sinks especially ones upstairs.  Open and close doors, any rubbing means settling.  Any foundation repair in basement.  Squeaky floors or steps.  Toilets shouldn't have any play in them.

If the sellers are smart they've hidden or covered up any visual problems that only an inspector will find.

is there a place for a glory hole?

Don't try to keep up with the Jones.  Buy what you really can afford.  Overlook the granite counters and tile floors.  All that can be had later.

What makes you think that is going to happen?

Pull up the carpet?

Real estate is all about timing, but unfortunately, nobody can predict the future.  In most places, housing prices are just now meeting or exceeding the 2008 crash.  So, strong gains in the past few years may not be a bad thing.  But, the future will always be somewhat uncertain.    

First and foremost, find a good lender and get yourself pre-qualified.  

Second, find a good Realtor.  Preferably a referral from somebody.

My next advice would be...Don't buy a house that nobody wants, because when you need to sell, nobody will want it then either.  This includes houses in flood zones, backing to traffic or high tension power lines, shitty neighborhoods, etc.....  

Don't buy the biggest or most expensive house in the neighborhood.  There will be little room for appreciation.

Make offers based on market data, not feelings.  

Find a reputable home inspector and be there for the inspection to ask questions.  Keep in mind that even the best home inspectors are generalists, so if he suggests contacting an expert, then do it!

Don't be swayed by cosmetics.  Homes with good roofs, foundations and mechanical systems are where its at.  These are expensive items and updating them doesn't add much value to a home.  You can find good deals on good homes that haven't been updated.

Never buy a home with drainage or water issues.  Fixing that shit is expensive and you will feel like you are throwing away money.

Unless they are prevalent in the market, don't buy a home with less than 3 bedrooms and 2 bathrooms.   It may be boring, but buy what's common in the area.  

You can fix a home, but you can't fix a lot or a location.

Don't buy more than you can easily afford.  You wind up resenting your home, not loving it.



   

Better yet scour the tax sales

Housing bubble was not allowed to fully deflate.  The banks hide a lot of homes they foreclosed on.  Our housing market was temporarily buoyed by the Hedge Funds and then by foreign investors who wanted to dump their dollars for tangibles.  That's slowing down too.  

Furthermore, when the interest rates are finally raised, then the derivatives market dies, taking the stock, bond and housing market with it.  Those with liquidity will be able to buy stuff cheap.

When you find a potential dwelling take the time to just sit in the area at different times of the day and night during the week AND on the weekend.   This may well reveal undesirable actions by your

potential neighbors that you would rather do without.  Barking dogs, loud parties, etc......   Good luck op, lots of info on this thread.

So if banks are controlling the supply how is that going to lower housing prices?

How long can interest rates remain low?

Read HG wells...

Build time machine....

Go back 5 years....

Buy one of those houses at that low price....

Profit?

lol.  a 50bp rate increase isn't going to make a damn bit of difference in the equity and bond markets.  it's been priced in already.

ar-jedi

Lots of good advice here!  



There's ALWAYS something that needs to be fixed with ANY house!  

Find one in a good school district (easier to resell) with "good bones".   You can paint and refinish hardwood floors cheaply.  

Hopefully your market doesn't heat up to where ours is now. Getting insane out there again.

We bought a new house (well, signed the purchase agreement - close in April) mostly because used houses in our area are selling in less than 48 hours again.

Some places were having offers accepted before we could even schedule a showing.

Remind me that I'm wrong after the Fed raises the interest rates.

Make sure it has a good foundation and roof.

Don't ever buy a home.  Rent.  Move when you want.  Upsize, downsize whenever you choose without worrying about the market.  Let the other guy pay to fix shit that's broken or a leaky roof.  

Never again for me.  I'm stuck upside down in a shitty situation and morally can't just walk away even though its financially the best answer.

I don't know.. I have made money on every house I have ever bought in the last 15 years. All told close to $150,000 profit in that time.

I now live on almost 17 acres totally paid for.

Never have to make a mortgage or rent payment again for the rest of my life.

Buy the best location you can afford, you can always improve the house, its rare a location gets improved.

THIS!
And make sure you check out the school district.

If you live where it snows, buy the biggest garage you can afford.

I'm so glad we didn't buy a few years ago.  We are facing a move this summer.  If your career is sketchy at all, rent dirt cheap and save until you at least have a house you can hold for a few years while paying for another place to live.  Don't become one of the people on the news talking about how they cant afford to move and find work.

When we move, we'll be renting as well.  At least a year until we decide if the area is worth staying in, and where the actual nice and shitty places are.  You can't really tell until you've lived in an area for a while.  Realtor's sure as shit aren't going to tell the truth, either.

This right here. Great advice.

Find an old house to buy.
The newer wafer board, vinyl sided, MDF, hollow core door homes will never hold any value. They're little more than mobile homes. $200,000 house become $75,000 very quickly.

Good advise here.
Use business sense not emotion

Some sellers be crazy , some deals need to be walked away from if they don't fall into place in a reasonable way .

Medium grade house in a good neighborhood can be fixed up into something but the greatest house/property in a crappy neighborhood will never be much .

It will take a bit of time to hunt down something good at a good price , don't settle

Make sure the fireplace is in the center of the house.

I just closed on a house last month. It took me  a year of looking for houses.

1. Make sure your borrowing form a good reputable bank and shop around for competitive rates.I think I would stay away from the little rinky dinky morgage companies. They end up selling your morgage to a bigger bank.

1. Once you find your bank get pre qualified of course

2. Get a good EXPERIENCED real estate agent! That could mean the diff in getting in on a deal that goes fast.

Assuming your buying used...
3. Be patient, look at a bunch of houses to get a feel for the market and what houses are selling for.

4. Be prepared emotionally and understand that you might lose deals. (It's expected).

5. There are always good deals to be had. People move or short sale all the time and need to get rid of them quick.

6. Once you pick a house ask your self " if I had to sell could I at least break even? "


So many more things but this is what I leaned. Good  luck

Flush each and every toilet. Make sure everything drains without problems including the tubs and sinks. Look inside the toilet tank. My wife found a house where the toilet flushed fine, but "bendy straws" were being used to fill the tank when it was flushed. Look for the drain cleanout and see if it is easily accessible. Open it up and see if you have any visible backup.

Get a one year home warranty purchased by the seller written into the closing if possible. This will help with any huge problems that come up in the first year, and will give you some piece of mind.