9 Questions to Ask Before Buying a House

by J. Money - Published March 20, 2019

cozy house

Morning!

So we’re three weeks into our house hunting journey now, and I gotta admit – I’m starting to come around to it more :) Between y’all’s emails of encouragement, and my wife’s desire to finally lay down roots in the city I love, I can feel the excitement bubbling inside of me as well.

Even if it’s just to see how fast we can become mortgage-free again! Haha… (I swear, gamifying stuff makes everything much more fun to deal with, doesn’t it?)

And after another full day of house hunting last weekend, I’m proud to say that we finally found not only the right *schools* for our kids, but also the perfect little neighborhood too! Which will now make future searching a LOT more focused, however on the flip side it also means a lot *less* inventory to choose from – and we also happened to pick a pretty sought after community it looks like…

But we still have a couple more months to go until it gets down to the wire! So wish us luck!!! And if we have to go back to renting a while longer until we find *the one*, well, then I’m okay with that too… I’m not 100% a convert just yet ;)

But on to today’s main topic…

Stumbled across this old post we did here on whether you’re financially ready to buy a house or not, and after seeing the “PS” section again I had no choice but to re-share it ;)

PS: For all new readers to the site, we ended up selling our house in January of this year and are now back to renting blissfully again… You never know what the future holds, but should we go down this path again you better believe we’ll be coming back to this checklist!

Whelp, and here we are again! Haha… Guess you never really do know what the future holds ;)

Here’s the list of questions I originally snagged from a Business insider infographic, followed by my current answers which is pretty much night and day from what they were 10 years ago…

If only I actually read these – and cared! – during that first experience!

9 Questions on whether it’s (financially) smart to buy a home
or continue renting

*******

#1. Do you plan on being in this home for five or more years?

Yup! It’s time to finally settle down!

#2. Do you have an emergency fund?

Double Yup! Been stashing a lot lately for any opportunity that may arise…

#3. By the time of purchase, will you have enough cash saved for a 20% down payment plus fees?

Yup! And it’s a buyer’s market right now so most sellers are covering the fees for people which will hopefully be the case for us too (although not sure how it plays out in hot communities?? The last one we saw go up was sold within 48 hours and heard the buyers ponied up 100% of the closing costs to seal the deal! Dang!)

#4. Are you saving for other major goals?

Nope! We were on the hunt for a minivan to replace Mrs BudgetsAreSexy’s dying car, however that’s been put on pause until we figure out the housing arrangement or it becomes an emergency… And hoping the former happens before the latter ;)

#5. Will buying a home wipe out all your savings?

Not all of it, but a good chunk! We’ll definitely need to tap our $50k in brokerage funds to help pump it back up again for sure… Especially since we plan on dropping that 20% off the bat.

#6. Can your budget handle not only your mortgage but also the taxes, maintenance, and incidental costs on a monthly basis?

Yup! Provided we stick to the budget and don’t over do it… Though it’s always that “maintenance” part that tends to keep me up at night, haha… I swear every day someone tells me about a $2,000 or $5,000 repair they need to do on their house!! Literally just received this one recently,

“The next time some jackal starts the whole own/rent debate you can tell them some homeowner in Internet Land has to pay $1,200.00 to get his furnace fixed today. Woohoo, put that in your pipe and smoke it buddy.”

(I love you readers so much, haha…)

#7. Do you have a credit score in the mid-600s or above?

Indeed! We’re both hovering around the 800 mark which should land us a pretty decent rate…

#8. Have you lived in the area before?

Yup! Not in this particular neighborhood, but in the general area for sure. And have lots of friends and family there too helping us navigate through the stuff we don’t know which is nice!

#9. Are you willing to be your own super (or pay someone else to do it)?

Nope!! Haha… okay fine, yes – but again the part I am least looking forward to. I will have no shame outsourcing the tricky work that needs to be done because I can’t do that and watch these babies and write this blog all at the same time! It’s pretty much adding a whole other child to the mix! And one that’s just as expensive! ;)

(That reminds me – remember the time I tried tracking all baby expenses until they turned 18??? LOL.)

*******

Okay, so what’s that – 8 or 8 1/2 out of the 9 questions answered successfully? I’d say that points favorably towards owning vs renting compared to the first time when we got a 4 ;)

Although of course decisions like this are more than just the numbers and I will forever be reminding people of that as well!! Just because it might make *financial* sense to own, doesn’t mean it will emotionally or lifestylely! (Real word!). Don’t let anyone shame you into the “American Dream” as they don’t have to live your life – you do!

Alright – your turn… If you own a house, how would you have scored on this had you answered these before you last bought? And would it have changed your decision at all?

Hard to stop the excitement when you’re on a mission, but hopefully anyone new to the house game is reading this so they don’t make such a lame decision like we did the first go at it! As you can see there’s a lot more to this stuff than just a quick “mortgage vs. rent” comparison!

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{ 48 comments… read them below or add one }

1 Marc March 20, 2019 at 7:03 am

I would have answered 9/9 when we bought our current home almost 3 years ago. Now, #1 doesn’t seem as sure as it did 3 years ago, and the reality of number 9 is a little more significant than I expected (more time and money than I would have guessed).

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2 J. Money March 20, 2019 at 7:35 am

Sounds about right!

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3 Bryan March 20, 2019 at 7:41 am

Hahaha…Thanks for the shout-out on #6. The furnace runs so smooth now :-) I had my home built brand-new in 2013, so I think no matter the age of the home, things will pop up from time to time.

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4 J. Money March 20, 2019 at 9:39 am

I couldn’t wait to share that note with the world ;)

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5 Rebecca March 20, 2019 at 7:52 am

Great post! My fiancé and I get married this August and we are currently in a house hacking situation (we are the renters). It’s saved us a lot of money, but we long for the day that we can have our own roots. We are still in debt, and working hard to pay it off, so we don’t see it happening in the next year or so. But, we still are trying to keep motivated. We hope to be able to have the same great financial situation that you have when buying our first home. We don’t want to rush into it, but somedays I wish it was just here already. Thanks for the wise tips to keep me in check so I don’t jump on it in my moments of weakness! When you’re paying down debt you have to stay strong and stay focused, and definitely don’t need to buy a house!

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6 J. Money March 20, 2019 at 9:40 am

Amen to that!!! Plenty of time – and houses out there – to own later on :) And will feel 100x better doing so too being debt-free!! I’m rooting y’all on!!

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7 Mr. r2e March 20, 2019 at 7:56 am

# 6 is a KEY question that many first time home buyers overlook. The ongoing maintenance of a home can add up quickly. When you get the home inspected maybe go a step further and have a roofer inspect the roof and HVAC people inspect heating/cooling/water system.

PS – Since buying my first home over 30 years ago I have a tenth question – Is the house on the low end or high end of the neighborhood. No, not home value. Is it literally at a lower elevation or higher. Our first home flooded 3 times in 3 years (and I was always told they were 100 year floods!).

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8 J. Money March 20, 2019 at 9:45 am

ACK!!! Good to note, thank you!!

One of the visits we did was during the rain and that showed a LOT about the properties – with one driveway having a massive puddle in the middle of it, and another having a small river run down it as it was situated higher up on a hill.. Never thought to house search during crappy weather but our realtor said it was super smart to do so!

Also assumed inspectors inspected the roofs and HVACs? Do they at least check them out briefly or not at all?

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9 Adam March 20, 2019 at 8:09 am

I never realized that the to-do list on homeownership would be so long and would literally NEVER be complete. In eight years we’ve covered new HVAC, new water heater, new gas line, $4k in insulation work, $14k foundation repair, a new dishwasher, and doubtless more stuff I’ve blocked out; we’ve got coming up a new driveway, new exterior paint job, a bathroom re-tile, a big landscaping project in our little backyard… but with each expenditure maintenance concerns go down and our home becomes more precisely what we want.

I just wish we’d been in a position to buy this place foreclosed and do it up RIGHT six months before the flippers did it up ‘eh, good enough’ and sold it to us. ;)

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10 J. Money March 20, 2019 at 9:47 am

OUCH!! I’m impressed you’ve had the cash though to outlay for all of that over the years?? Imagine if you didn’t and continued to rack up the debt??? *shiver*

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11 Adam March 20, 2019 at 10:26 am

Heh, that’s so not an option. My wife is now concerned that our savings accounts have dipped below one-year emergency fund levels (until next month when they’re fully replenished). Luckily she makes more than I do and saves better than I do, so she’s well empowered to fix the problem!

Man, debt is frightening. I’m so fortunate to have learned that with a co-signed $750 limit CU Visa in college rather than a shiny new card and five-figure credit limit after college. #1 tip for parents: as soon as your kid has a job, get ’em a low-limit card and let them figure it out on their own… before it really hurts.

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12 J. Money March 20, 2019 at 4:45 pm

Good for your wife!! Actually just wrapping up my post for tomorrow which is on exactly that – a spouse making more than the other, particularly the wife. Would love your thoughts when it comes out!

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13 Nate March 20, 2019 at 8:14 am

The only thing we didn’t have was 20% down payment. Which I know should have been a big no-no, but we made a calculated risk. We bought at the bottom of the low interest rates 4 years ago and house prices were increasing rapidly. We gambled that if we were to have waited two more years and had 20% down it would have made the home significantly more expensive due to higher interest rates and increasing home values. Turns out we gambled correctly (as of right now) as interest rates have quickly climbed beyond the point where our mortgage plus PMI is cheaper and our home has appreciated 20-25%.

That being said, if we needed to move and sell our house for some reason I’m not sure if I’d buy again. We rented homes for several years before this and I never cared if the lawn was spotty, or if the kitchen cabinets could stand to be refinished or replaced, or if the light fixtures were dated and ugly. Now that I own our home, I care about, and want to fix all of these things. I prefer the years of not caring.

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14 J. Money March 20, 2019 at 9:49 am

Amen to that, brother…

And saving up 20% is no easy task either for most people, so I’m sure way more do without than pony up. (At least the younger generations)

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15 Paul March 20, 2019 at 8:40 am

Just remember as the great George Carlin once said its called the American Dream “because you have to be asleep to believe it”.

Anyway, I feel you on wanting a house of your own. I think most people understand. The Two things I would say to you is: #1 Don’t buy a house that needs work, that will destroy any progress you are trying to make for at least 5 years. #2, If you try to make a offer on a house and you aren’t prepared to walk away you’ve already lost all of your bargaining power, you might as well just offer full price no contingencies. I myself would always ask for 3-4% (whatever max allowed is) closing help at the very minimum but I guess we are entering prime buying time of the year since its spring.

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16 J. Money March 20, 2019 at 9:53 am

Yup – I told our realtor I never ask for full price and he basically said that I better be ready to lose a few houses then, haha… In the months we’ve been watching the market like a hawk, about 90% of the homes we liked were sold within a week, and the others – which are priced too high – have been on the market for over 100 days. So it seems like those who are pricing them right are getting full price for it plus or minus closing cost stuff..

Though we do have the perk of having no contingencies and strong financial backing which should hopefully carry us strong… And my wife can write a great tear-jerking letter too when needed :)

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17 Paul March 20, 2019 at 10:43 am

I got my house during a sellers market. Things were disappearing within a few day to a week. In fact we sold our townhouse on day 1 of it being up for sale. The place we bought (where we live now) I did offer full price but 3% closing help, which they accepted. It was only on the market 4 days so I was surprised they conceded at all. Never hurts to ask I guess.

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18 J. Money March 20, 2019 at 4:59 pm

Really good luck there! I remember being a realtor in the early 2000’s and bidding wars going BONKERS everywhere… People offering $20,000-$50,000 over asking AND waving inspection fees!! And then we all know what happened after that, womp womp….

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19 Paul March 21, 2019 at 8:42 am

And that’s why we are in this boat now… back in 2000 you could buy a decent home in this area for less than $200k. by 2004 the absolute minimum was $400k and its only gone up from there. I would go so far to say as that a decent house costs at least $550 – $600k on the conservative end of the spectrum. Would have been great if I weren’t in college and home ownership wasn’t the furthest thing from my mind. Would have been nice to get in and 2 years later double your equity. Shoot, now homes are even considered investments anymore, just a place to live. Ill consider myself lucky if this home value even rises with inflation.

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20 Financially Fit Mom March 20, 2019 at 8:48 am

I bought my first house in 2008 (yikes) and would have had a 4 on this list. Even with the sale nearly $50K under the asking price (but within my budget!), it didn’t take long for me to be upside down. After living there a few years, I learned some things I thought I knew about myself weren’t actually true and were just ways I grew up (a ginormous yard isn’t a must for everyone) and tried to sell a couple different times but was unable to because of how much I owed tied with how much liquidity I didn’t have. Buying that house was the right decision at the time; it served me and my daughter well, and I learned SO much being there. We (I got married in that ginormous back yard) sold the house in 2017 and have been renting for about a year and a half and while not many people understood the decision, I haven’t had a single doubt or regret. My daughter came home to a flooded kitchen once…I called the landlord. We had some sprinkler heads not working…I called the landlord. This will be my 3rd summer where I have minimal yard maintenance and I can go hiking and biking and all the things instead of being haunted by that ginormous yard. However, (I swear I’m not intending to sway you back by sharing my current bliss), we made the decision to sell in a sellers market and received more than 5 at or over asking price offers the same weekend we listed the house. What really drove the decision was having the knowledge of an available rental in the neighborhood we were seeking. We are ready to move neighborhoods again within the next year (I chase the schools – it’s so convenient living within walking distance!) and we have the flexibility to up and do so as soon as we find something. This will be our last school location driven home though, so from there it may be buying again. I actually enjoy the maintenance part of home ownership because I learn new things, and by the time I own another house, I won’t be working a full time job anymore or have a toddler running around so I’ll have the time to learn those new things! I would say the greatest thing about scoring high on your checklist isn’t just to be ready to buy, but it provides you the financial flexibility to not be stuck where you are. You have options! Worst case scenario, you can wait out the market and then sell and go back to renting and then buy again later if it makes sense (or have your own rental!). Buying can be fun and it sounds like you are in the right spot, know what you want, and have time to be picky. I say enjoy the process and take advantage of the free cookies at all the open houses!

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21 J. Money March 20, 2019 at 9:58 am

haha thank you!!

loved reading your note here so much and envisioning your daughter growing up and accompanying you on all the moves :) I agree being able to walk to school is a massive lifestyle win!!!

And also agree that we often overlook what we really want vs need… Ironically a large backyard IS important for us (if these boys don’t have a place to run out their energy I’m in trouble!), however other things that I thought were important aren’t as much – like needing a separate office space (i much prefer kitchen tables and coffee shops) or even having a hundred bathrooms… Two is just the right amount for when every kid in the house all of a sudden has to go at the exact same time (!!!!). Which is another pro for having a large backyard – i can also just send them outside ;)

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22 Joe March 20, 2019 at 9:48 am

We’re trying to sell our condo. It’s a pain. I think that’s the worst part of owning a home, when you’re selling. The selling process is ridiculous. Why does it cost so much?

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23 J. Money March 20, 2019 at 10:02 am

yeah – much easier on the buying side than selling for sure :(

hopefully you come out with some extra $$$ in your pockets though!! that should help ease the pain! :)

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24 mobilehomegurl March 20, 2019 at 11:03 am

Great questions to ask J! I’d probably score all of them except for #9 which can be tricky. I’m not that great using my hands so I’d probably outsource some of the work. Though I have done quite a bit of work in the past with the mobile home business. I remember cleaning them myself in the beginning and some of the residents asking if I was the cleaning lady, haha. Good luck with your home search! :)

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25 J. Money March 20, 2019 at 5:00 pm

I bet it’s a lot easier maintaining a mobile home than single family ones! More for your buck too :)

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26 spaceman March 20, 2019 at 12:43 pm

1, you have to love it, as you will be there for a long time (10 years is possible)
2. can you afford it, and fund a retirement goal ? – think your good
3. inspect the hell our of it – asbestos is a pain to get rid of if you do any renos
4. check what kind of neighbors live next door – your stuck with them for a long time.

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27 J. Money March 20, 2019 at 5:02 pm

Haha yes, but how the heck do you learn about your neighbors before living there?? Just know and ask to see if they wanna hang out or something? :) (I never got this btw with why people say they hate renting… “you never know who you’re going to live next to!” But with renting it’s so much easier to get up and move out when you have $hitty neighbors than when you own?!)

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28 Revanche @ A Gai Shan Life March 20, 2019 at 1:10 pm

1. Yes
2. Yes though we wiped it out for renovations temporarily (and refilled it after all the dust settled with the purchase and sale of our old place)
3. Yes, though it was more than I wanted to spend
4. Just that big “I want a ton of money” goal.
5. Same as 2
6. Yeah that was painful though. Especially that $14k new furnace and all new ducting. Shooot.
7. 800+ Woot!
8. Yes
9. Sigh. Yes but I hate it.

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29 J. Money March 20, 2019 at 5:02 pm

You pass, Mrs. 800+ :)

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30 CK March 20, 2019 at 4:48 pm

Whatever you do, check the school districts out! The cost of private school if you are in a bad school district could be put instead towards a mortgage in a better district.

Also, make sure you get a right-sized house. Any extra space will have to be heated/maintained/cleaned as well.

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31 J. Money March 20, 2019 at 5:03 pm

Already got that first one checked off the list – now we’ll see how well we do w/ the 2nd one ;)

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32 StackingCash March 21, 2019 at 1:33 am

Pretty much had all of that covered except for some strange reason I didn’t anticipate the property tax being so high…but then again if you want to play with the big boys you have to spend big. It was crazy to think that I had started looking at houses around the 300k range and ended up spending double. I had missed one opportunity in 2012 to buy a house for 290k because I didn’t budge on a 10k difference, regrettable because that house is worth conservatively about 450k now. So fast forward to 2016 I buy a new construction house for 600k! Scary, but super happy with the house and hood. The reason being is that the majority of the neighbors are super nice. I suspect they are super rich (seems like everyone has a Porsche in the garage) and are happy because they don’t have to worry about money unlike myself. Granted 600k is relatively cheap in some areas in the country but in Las Vegas, it’s fairly significant. I felt like we snuck into this hood because of our super big down payment, not income, unfortunately. Anyhow, one more house buying tip that you should be concerned about is how much traffic you will get in front of your house. Even in my quiet neighborhood there are some streets that get way too much, too fast traffic.

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33 J. Money March 21, 2019 at 6:29 am

Wow – that is a big jump in price! Haha… And coincidentally we started our search at around $300k too :) Which will probably be super hard to find in the area we now picked, but looks like the averages there are only slightly higher in the 350k range so now I won’t feel as bad for “splurging” ;)

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34 SL March 21, 2019 at 9:00 am

#1. Do you plan on being in this home for five or more years?
Knock on wood!
#2. Do you have an emergency fund?
Yes
#3. By the time of purchase, will you have enough cash saved for a 20% down payment plus fees?
Sure did! See #5
#4. Are you saving for other major goals?
Nope
#5. Will buying a home wipe out all your savings?
almost none! Previous equity did my extensive down payment and remodeling on the new home.

#6. Can your budget handle not only your mortgage but also the taxes, maintenance, and incidental costs on a monthly basis?
Yes — including the unexpected hidden tax gotcha that raised my taxes 400%
Check your homesteading laws – I bought from a 95 year old person who lived in the house for 50 years. in Texas homestead laws state taxes cap at what you paid at the age of 65. I did not know this. I got caught by a 30 year difference in tax amounts. Ouch.

#7. Do you have a credit score in the mid-600s or above?
Yes
#8. Have you lived in the area before?
Yes
#9. Are you willing to be your own super (or pay someone else to do it)?
Yes —
Horror story; great insurance! 31000 plumbing issue to dig completely under the house and replace a LOT of pipe. Go USAA – paid out in a couple of days and I “only” had to pay for the actual plumbing – about 2500. that is what savings for emergencies are for, right?

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35 J. Money March 21, 2019 at 11:38 am

Hot damn – well done on that insurance!!! And for using that previous equity to fund that down payment and upgrades on the newer house – that’s awesome :)

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36 Paul March 21, 2019 at 1:18 pm

We would have scored 8/9 for our current house. It was question 8 (have you lived in the area before) that we failed, and that’s been telling. We like the area and the schools are great, but it’s simply a solution to an engineering problem and we’ll probably move 10 minutes after our youngest graduates high school. Renting first is a great idea, but it can become an expensive option (esp. since we bought at the absolute bottom of the market). Good luck in the hunt!

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37 J. Money March 21, 2019 at 2:15 pm

Makes sense! Thanks for popping in!

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38 Kanna456 March 21, 2019 at 5:31 pm

Please research one shot / single premimum PMI (Private Mortgage Insurance) than the traditional ones if you don’t intend to put down 20% Down. This will save you atleast in thousands of dollars towards the PMI. Secondly, keep track of your equity and make sure you call your lender once you attain 20 /22 % equity. I have heard stories of people paying the PMI’s even after attaining the 20 %.

Happy Hunting !

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39 J. Money March 21, 2019 at 6:04 pm

Yes – great points!!

We’re putting down 20% so thankfully we’ll avoid it, but never thought about the “keeping track of equity” part to nix it once it’s time! Very smart.

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40 Suzie March 23, 2019 at 12:23 pm

Good points and good comments. I would definitely second the comments about property taxes and property elevation. Just two more quick pieces of advice. The first, VERY IMPORTANT! Is there an HOA (Homeowners Association for the uninitiated). These can be both expensive and a royal pain in the butt. Second suggestion, just a thought. If possible do some online research or even ask your insurance agent if possible to see if you can get a feel for whether insurance rates for both cars and homes may be more expensive in that area. Where I live in the mid-west car insurance rates can fluctuate a lot depending on the area or suburb. Not to mention the infamous “flood plane.”

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41 J. Money March 25, 2019 at 2:03 pm

Def. keeping my eyes open on that HOA stuff! An aunt of mine used to pay over $1,000/mo for her HOA dues! Granted she was in a condo complex, but still – the money alone could be just as annoying as the rules you need to adhere too :) (I remember once seeing a place in NYC for sale for only like $200k and was wondering why it wasn’t selling for a while, and then eventually found out – the monthly dues for almost $2,000/mo – more than the mortgage payments! Yikes!)

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42 Jules March 24, 2019 at 12:31 pm

Congrats on being soooo close to getting into a house, J! This checklist would have been helpful for me about a month ago, when I was in the middle of escrow.

But thankfully, even though it’s all said and done now, I scored 8 out of 9! Phew.

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43 J. Money March 25, 2019 at 2:03 pm

I’m glad to hear that :)

And thanks for the well wishes! I’ll take as much as I can get these days, haha…

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44 Luis Jara March 25, 2019 at 2:24 pm

8/9
In our home for about 1 year and a half and the maintenance stuff got us good.
1. A/C compressor went out in first 2 weeks. Whole system replacement recommended due to older freon. (Covered by warranty after a long fight) $2,600 3 days worth of work.
2. 3 Months later electrical issue with living room lighting. (Contractor friend helped fix) $65
3. 6 Months later refrigerator goes out. (Warranty would not cover. Learned to fix on my own) $65 1/2 day worth of work.
4. 1 year later Water Heater goes out. (Warranty wouldn’t cover since parts were under manufacturer warranty. Contractor friend helped to replace and manufacturer provided most of the cost for a new water heater). $500 A days worth of work.
5. 1 year later Garage Door Opener goes out. (Replace on my own with higher horsepower unit and learned the hard-way that I needed a stronger anchor with more horsepower). $150 a days worth of work.
6. Last month the fence came down after a wind storm. (Contractor friend just fixed it up). $850

All in all. It’s good to have a contractor friend who could help with tips, a hand and even get the work done at a decent cost when needed. It’s also a good idea to learn how to work on your own home.

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45 J. Money March 26, 2019 at 5:55 am

Damn – no kidding!!! And exactly what scares me about owning again, ugh…

Hopefully you got all the nasty surprises out of the way though and you’re now good for a while!

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46 Joel March 28, 2019 at 11:05 am

Great tips! Buying a house, while exciting, is major financial decision. I am myself in the process of buying my own place. I am still deciding whether to buy a duplex, live in one unit and rent the other one, or buy a condo. Either way, I’ll have to come up with the 20% down, which is a challenge.

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47 J. Money March 28, 2019 at 6:08 pm

People RAVE about that duplex idea, at least in this online community :) It’s like every other article on real estate sites, haha….

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48 Joel of GrowthRapidly March 30, 2019 at 5:54 pm

Thanks, and after further research, I think I will go for the duplex. It makes more sense financially for me. Live in one unit, and rent the other.

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