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3 Concerns When Buying Your First Home

Posted: Friday, November 13, 2009

by Jim Johnson
Metropolitan Mortgage

The first of a series on the new real estate market

I know that the very first thing you did was to get qualified for an FHA mortgage and that you have the 3.5% down payment. Next I know you have engaged a qualified loan officer and real estate agent.

1) Always keep in mind your first home will probably not be your last home. So what should you be looking for when buying a home for sale in Everett? For the last 15-20 years everyone thought you couldn't lose value owning a home. Well, welcome to the free market. Every thing in life goes up and down. So look for a home that is structurally sound but, quite frankly, looks like heck. Why? It's called sweat equity and it's still out there. I counsel sellers to have curb appeal. I counsel buyers to look for homes that don't look good from the street. You will need some imagination to see what your new home will look like after you have fixed it up. If it looks bad then you can bargain with the sellers. Pick the ugliest one in a neighborhood in transition.

2) What is a neighborhood in transition you say? Well just really look at the street. Do you see a mix of owner occupied homes in with rentals? You can almost tell a rental from the outside every time. Is the grass cut, paint peeling or roof tabs curling? On 3 tab roofing a sure sign it is old is when the edges start to curl. Do the rental have a general feeling of being run-down? Now look at the well cared for homes. You know the ones with good paint, better windows, neatly trimmed lawns and a general air of care. If you have picked out a possible home drive around the neighborhood. Try and see what the general area "feels" like. Does it have a good feeling or not. Are there a lot of bars on doors or windows? If you see that look run don't walk out of there. Now imagine what will the area look like in 2-5 years? You can research the tax basis for the area at city hall. You can find crime statistics at the police department. OK, you have found an area that you might consider buying in. Now how about the home itself. Keep in mind while a FHA mortgage usually doesn't allow you to buy a heavy fixer, there is an element of caveat emptor.

3) An old time real estate agent once told me to always remember the 3 S's. They are sit, sip and Poop. Sit, does it have a foundation. FHA mortgages require a minimum type of foundation. If so what type of foundation do you have. There are several acceptable types. Post and pier is OK but has it been earthquake updated. That is easy to see. Take a flashlight and look under the home. Where the posts joint the underbody of the house (these are called floor joists) do you see what looks like metal tape connecting the post laterally to the joist? If you see that on all of the posts then the home has been earthquake updated. If there are concrete bricks or walls around the parameter of the home look at the walls themselves. Small cracks are normal for an older home. But major cracks are not. Now just because there are a few major cracks doesn't mean you shouldn't buy. What it means is you need expert advice on the repairs. You may have a real bargain here. Fixing those cracks isn't that difficult or that expensive. Get some estimates and maybe get an FHA mortgage called a 203K loan. I'll explain a 203K mortgage in a later blog post. That was the sit now the sip. Are you on city water? If you are no sweat. Everett's city water is quite good. If you are on a well then you need to check to see if the water is a year around source. Also is the water hard and in need of a treatment facility. Is the pressure good? That is the sit and sip and now the Poop. Are you on city sewer? If not what type of septic system does it have? It must be drained before a sale because that is a condition of an FHA mortgage. Where is the field located? I have actually watched a field rise up and explode right in front of my eyes. Is the system an "A", "B" or "C" type system? An "A" field is one where the county has the plans on file and you can upgrade the system. A "B" field can have slight modification made to it but you are limited in what you can do. Stay away from a "C" field unless you get a really great deal and have the money for a new system. "C" fields are a real problem if there is open water around the prospective home.

Well there is a lot more to buying real estate. In the next blog post I'll cover electrical, remodeling and plumbing. Also what to look for if you want to expand the homes footprint. But in today's market getting the financing is the hardest part. So get qualified for the FHA mortgage and start looking.

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Jim Johnson E.A. retired; (Enrolled Agent, licensed to practice law in tax court) BS -19+ year experience as an independent loan officer. My background is extensive: 15 years as an Enrolled Agent Licensed to Practice law in tax court, Real Estate Agent 15 years, BS Accounting, Economics University of Wisconsin - Milwaukee.

In 2009 I ran for mayor of Everett, WA I lost but did receive 30% of the votes.

Currently I offer local political commentary in KSER Radio 90.7 FM every Wednesday at 9:05 AM.

Viet Nam Veteran

Everett Mortgage on Line

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