[Mel]

I’m looking to buy my first home in a year or so and I’m looking for advice, so I thought who better to ask than a bunch of accountants? I’m sure a lot of you have experience with this so give me your lessons learned, do’s & dont’s, websites I should check out, etc. Thanks for your help!

[jeff]

Here's some tips from Dave Ramsey:

https://www.daveramsey.com/blog/3-mistakes-ruin-home-buying?ictid=text2.130403.ruinhome

My advice: use a buyer's agent with a rockstar reputation – don't use an agent who is a relative or a friend just because you know them.

Also – don't skimp when hiring an inspector. A really good inspector will cost more, but will be worth it if they find something the others don't.

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[jeff]

Here's some tips from Dave Ramsey:

https://www.daveramsey.com/blog/3-mistakes-ruin-home-buying?ictid=text2.130403.ruinhome

My advice: use a buyer's agent with a rockstar reputation – don't use an agent who is a relative or a friend just because you know them.

Also – don't skimp when hiring an inspector. A really good inspector will cost more, but will be worth it if they find something the others don't.

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[littlenumberrobot]

Or if you use a relative/friend make sure they are well connected or work with someone with a rockstar reputation. I just bought my first home last year with my brother in law as my agent. Our local market is flooded with investors who offer cash, he wrote up an awesome offer and we won over the cash offers PLUS 30 day escrow(it was a traditional sale). He worked under a guy who had 20+years of experience, so just make sure they know their stuff.

Be prepared to tell them every little detail. Ha I had to explain why my W2 wages went down from leaving a firm that I worked insane hours to a nice firm that I only work OT during tax season. My hourly went up with the job change but they only look at W2's.

CA CPA - All because of the journey listed below
-----------------------------------------------------------------------
FAR - 53('10), 8/25/12 79 PASSED!
REG - 66('11), 69('12), 12/06/12 77 PASSED!!
BEC - 58('10), 74('12), 01/05/13 77 PASSED!!!
AUD - 43('11), 66('12), 69('13), 74('13) 7/29/13 85 PASSED!!!!!

(Combinations of Roger, Yaeger, Wiley Book, Wiley TB, & NINJA Notes)

Ethics 90%

[littlenumberrobot]

Or if you use a relative/friend make sure they are well connected or work with someone with a rockstar reputation. I just bought my first home last year with my brother in law as my agent. Our local market is flooded with investors who offer cash, he wrote up an awesome offer and we won over the cash offers PLUS 30 day escrow(it was a traditional sale). He worked under a guy who had 20+years of experience, so just make sure they know their stuff.

Be prepared to tell them every little detail. Ha I had to explain why my W2 wages went down from leaving a firm that I worked insane hours to a nice firm that I only work OT during tax season. My hourly went up with the job change but they only look at W2's.

CA CPA - All because of the journey listed below
-----------------------------------------------------------------------
FAR - 53('10), 8/25/12 79 PASSED!
REG - 66('11), 69('12), 12/06/12 77 PASSED!!
BEC - 58('10), 74('12), 01/05/13 77 PASSED!!!
AUD - 43('11), 66('12), 69('13), 74('13) 7/29/13 85 PASSED!!!!!

(Combinations of Roger, Yaeger, Wiley Book, Wiley TB, & NINJA Notes)

Ethics 90%

[oilgaslb]

Get multiple pre-qualifications from multiple sources (bank, small firm, large firm). Getting 4 offers won't hurt your credit score more than 1, as long as it's within a short time period (I think 20-30 days?).

[oilgaslb]

Get multiple pre-qualifications from multiple sources (bank, small firm, large firm). Getting 4 offers won't hurt your credit score more than 1, as long as it's within a short time period (I think 20-30 days?).

[Lindrobe]

Don't buy more of a house than you need! My husband and I live in a modest 1500 square foot house that will be paid for my the time I am 38 years old. The house was built in 1988, totally outdated when we bought it. Over time, we have completely updated the house as we could afford it. I would rather buy a cheaper, outdated house that needs work any day than be stuck with an huge mortgage payment every month.

FAR 12/3/14, 87
AUD 2/3/14, 90
BEC 4/1/14, 88
REG 5/27/14, 94

Licensed CPA, Indiana

"Successful people do things that unsuccessful people don't want to do"

[Lindrobe]

Don't buy more of a house than you need! My husband and I live in a modest 1500 square foot house that will be paid for my the time I am 38 years old. The house was built in 1988, totally outdated when we bought it. Over time, we have completely updated the house as we could afford it. I would rather buy a cheaper, outdated house that needs work any day than be stuck with an huge mortgage payment every month.

FAR 12/3/14, 87
AUD 2/3/14, 90
BEC 4/1/14, 88
REG 5/27/14, 94

Licensed CPA, Indiana

"Successful people do things that unsuccessful people don't want to do"

[Anonymous]

Buy a house as if you are an investor but you have to be willing to learn to do some handywork. You can learn a lot using google and youtube on how to fix stuff if you are willing to put in the effor.

Don't go out with an agent like most buyers and fall in love with a house–be more analytical. I made that mistake with my first condo that we are still trying to unload without taking a bath.

Inspector is important but you may be able to live without a buyer's agent if you do your homework or if one just helps you with the contract. That can give you some pricing flexibility when dealing with the seller since they don't have to pay an extra commission. Just call the listing agent if you want to see a house and have them meet you there after you do your own homework.

On my second purchase, I did a spreadsheet comparing the zestimate zillow value vs. the listed price of the house to find homes that were undervalued. That was how I found my house and I didn't get into issues with negative equity when the market turned like a lot of people.

[Anonymous]

Buy a house as if you are an investor but you have to be willing to learn to do some handywork. You can learn a lot using google and youtube on how to fix stuff if you are willing to put in the effor.

Don't go out with an agent like most buyers and fall in love with a house–be more analytical. I made that mistake with my first condo that we are still trying to unload without taking a bath.

Inspector is important but you may be able to live without a buyer's agent if you do your homework or if one just helps you with the contract. That can give you some pricing flexibility when dealing with the seller since they don't have to pay an extra commission. Just call the listing agent if you want to see a house and have them meet you there after you do your own homework.

On my second purchase, I did a spreadsheet comparing the zestimate zillow value vs. the listed price of the house to find homes that were undervalued. That was how I found my house and I didn't get into issues with negative equity when the market turned like a lot of people.

[smp73]

A good home inspector is worth their weight in gold. I did not have a great one and 3 months after I moved into a house with a “new” roof it was raining in my living room. I probably wouldn't have bought the house had I known the roof was 20 years old.

Also, don't buy a HUGE house if you don't need the space. Depending on where you live heating costs can go through the roof.

Oh and consider property taxes. My town/county taxes are like nothing but the town/county services are a bit lacking you could say….aka plowing.

Good luck!

NYS CPA License # 113563
CIA: Done as of 2/15/14

Training for a half marathon post studying!

[smp73]

A good home inspector is worth their weight in gold. I did not have a great one and 3 months after I moved into a house with a “new” roof it was raining in my living room. I probably wouldn't have bought the house had I known the roof was 20 years old.

Also, don't buy a HUGE house if you don't need the space. Depending on where you live heating costs can go through the roof.

Oh and consider property taxes. My town/county taxes are like nothing but the town/county services are a bit lacking you could say….aka plowing.

Good luck!

NYS CPA License # 113563
CIA: Done as of 2/15/14

Training for a half marathon post studying!

[Anonymous]

To support the “don't hire a friend/family just because” argument, when we first started looking we used the husband of my wife's coworker as our agent. He was brand new to the game, and it showed. We ultimately had to switch agents because it wasn't working out well, and it made my wife's relationship with her co-worker go south quickly.

Other points:

1) Getting pre-approved for a loan helps when you make an offer to a buyer, but the amount you get pre-approved for generally isn't very reliable/realistic. We were house shopping right after the crash in 2008, and we somehow got pre-approved for $275,000. It's a very rough estimate based on your gross income and a credit report. I was much more realistic with what we could afford, so when it came time to finance $137,000 we found out that due to debt:income ratios and whatever other junk banks look at, we would have never have been able to afford that initial estimate.

2) Pay attention to your loans/credit cards now. When you go to get financed, banks look at your debt:income ratio (or whatever they call it). For us, they looked at all of our loans and credit cards (despite carrying zero balances forever) and worked out what our minimum monthly payments were for the collective group. They compare that total to your monthly income and the ration has to hit some sort of mark. My suggestion is to get a free credit report and evaluate where you stand now. Don't cancel cards unnecessarily because decreasing your total credit line will hurt your credit score.

3) Be choosy about your location. Property taxes vary wildly from city to city. Also pay attention to any local income taxes you might need to pay. It makes a big difference in what your monthly payments turn out to be.

4) Don't buy more house than you need. I don't care if you can afford that big house with 10 bedrooms, 7 bathrooms, and a bowling alley. If it's a family of four, you don't need that much space and you're wasting money taking out that large of a mortgage.

5) Be skeptical of everyone you hire to help you get the job done. Agents earn a commission: are they working for you or are they trying to get you to spend a lot in a short amount of time? Make sure the inspector is independent of the agent, etc. I hate to sound like the world's out to get me, but there's a lot of unscrupulous people who wouldn't bat an eye at screwing someone over.

[Anonymous]

To support the “don't hire a friend/family just because” argument, when we first started looking we used the husband of my wife's coworker as our agent. He was brand new to the game, and it showed. We ultimately had to switch agents because it wasn't working out well, and it made my wife's relationship with her co-worker go south quickly.

Other points:

1) Getting pre-approved for a loan helps when you make an offer to a buyer, but the amount you get pre-approved for generally isn't very reliable/realistic. We were house shopping right after the crash in 2008, and we somehow got pre-approved for $275,000. It's a very rough estimate based on your gross income and a credit report. I was much more realistic with what we could afford, so when it came time to finance $137,000 we found out that due to debt:income ratios and whatever other junk banks look at, we would have never have been able to afford that initial estimate.

2) Pay attention to your loans/credit cards now. When you go to get financed, banks look at your debt:income ratio (or whatever they call it). For us, they looked at all of our loans and credit cards (despite carrying zero balances forever) and worked out what our minimum monthly payments were for the collective group. They compare that total to your monthly income and the ration has to hit some sort of mark. My suggestion is to get a free credit report and evaluate where you stand now. Don't cancel cards unnecessarily because decreasing your total credit line will hurt your credit score.

3) Be choosy about your location. Property taxes vary wildly from city to city. Also pay attention to any local income taxes you might need to pay. It makes a big difference in what your monthly payments turn out to be.

4) Don't buy more house than you need. I don't care if you can afford that big house with 10 bedrooms, 7 bathrooms, and a bowling alley. If it's a family of four, you don't need that much space and you're wasting money taking out that large of a mortgage.

5) Be skeptical of everyone you hire to help you get the job done. Agents earn a commission: are they working for you or are they trying to get you to spend a lot in a short amount of time? Make sure the inspector is independent of the agent, etc. I hate to sound like the world's out to get me, but there's a lot of unscrupulous people who wouldn't bat an eye at screwing someone over.

[soncarlos]

Hey Mel4CPA,

I just bought my first home last October. One advice I can share is to check with your County's housing authority or office. Many counties offer a Mortgage Credit Certificate, it's a really cool benefit. You can get up to $2,000 tax credit for the remaining of the loan as long as you live in the home you purchase. That's $2,000 every year. (it's based on the amount of interest you pay in the year). I got lucky and qualified for it. Many counties extended this certificate for 2014, that's why you should check with them. If they don't have it, they may have other programs available to you.

Oh, one more thing, the bank will add the $2,000 to your income, which will qualify you for even a higher loan amount.

Good luck with your house hunting and the exams.Looks like you're almost there! I still have 3 to go….

[Author]

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