Moving, maybe buying soon, any advice?

Hey all,

As some of you may remember I interviewed at UWisconsin for grad school a couple months back (among other programs) and my wife and I decided Madison and UWisconsin is the best place for us right now. On to the real question: do you guys have any advice for someone who is looking to be a property owner for the first time? We're likely going to be looking at condos, but we are pretty green when it comes to the entire process and it seems like many of you (wiser) folk are property owners. Any advice would be greatly appreciated!

And to Pumbaa, I'd be more than happy to attend a SEWAGE meeting or 2 when I get there as long as I could make the trip, I don't know if all the meetings are planned for Milwaukee.

Matt

IMHO dont buy anything uless you can afford to live the lifestyle you want on only 25% of your income.

Simple for example:
If you make $1000 a month (after taxes) dont buy unless you can live like you want on $250 a month. Figure half of your $$ will go to rent and the other 25% should go into a "oh ****"/retirement account

If you can get a good deal on a mortgage (which you should) don't get scared off from Interest Only loans. In an area with good appreciation, they are a great way to help you afford your first home.

Talk to me when you start looking at neighborhoods. I've lived here my entire life and have a good idea what most of the places are like.

Remember that the realtor will always tell you that they work for you. This is false. They work for their commission, which is paid to them when you buy the house. Their main goal: get you to close and it's a bonus if you close on a house for a high price.

Make sure you visit the neighborhood the place is in (And this applies to renters too) at least 2 times without the realtor: Once on a weeknight and once on Saturday night, both after dark. The character of a neighborhood can drastically shift from daytime to night.

Take a GPS when you go looking at houses. Then afterward check the route the realtor used. Sometimes they take you the 'back way' to a house so you don't see the nearby undesirable neighborhood/business/development/etc.

Always get a home inspection. Try to avoid a home inspector that either the listing agent or your realtor have an existing relationship with.

I suggest this, frankly: the apartment market here is pretty soft and you should be able to get a month to month fairly cheap. Move here to an apartment and then spend a few months finding the RIGHT house. Besides-- it's often cheaper to buy a house in winter since there's fewer people looking to buy.

When looking at condos find out about the covenants (maybe you can't brew on your patio) and check on how much the association fees have changed in the past. It's also good to find out if there have been any major repairs on the property & how large a reserve for emergencies (like roof damage) the association carries.

Even though a mortgage company might qualify you based on a payment being 1/3 of your income, it is a very good idea to keep it under 1/4 of the gross.

Don't fall in love with a paint job or new carpet. In many cases, these two mean a badly maintained unit that had to pony-up to sell.

Always insist the seller pay for a year of home owner's insurance. All 13 places I've owned have had problems (mostly water heaters & stoves, but once a 5-ton heat pump) in the first year.

edit: sounds like kornkob could be your crazy uncle for a few brews.

Find a good bank to take out your mortgage with. I am a grad student that just recently bought and dealt with the school's credit union, this was a huge help.

Some great advice. Mine would be, don't buy a fixer upper unless you're really confident that you have the means to do what needs to be done--either doing the work yourself (do you have the time, skills, tools, inclination) or the money to pay someone else to do it (think of it as part of the purchase price).

Otherwise, you end up with an ongoing project house, which is OK unless you suddenly need to sell, and then you have no choice but to spend a fortune to get it ready.

If you're looking at condos, that's less of an issue.

Don't worry much about decor in terms of paint, wallpaper, etc. That's easily changed. Worry more about floor coverings & kitchen and bathroom fixtures--that stuff is not easily or cheaply changed.

cweston said:

Don't worry much about decor in terms of paint, wallpaper, etc. That's easily changed.

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But, if this stuff is outdated and in needs of upgrading, exploit it and get a lower price then fix it when you move in.

On that note, get a good realtor too. As the buyer it cost you nothing, and they know their stuff and look out for you (it is nice to have someone on your side with experience). What ever you do, do not let the selling agent represent you (this is what will happen if you start looking without your own realtor).

david_42 said:

Don't fall in love with a paint job or new carpet. In many cases, these two mean a badly maintained unit that had to pony-up to sell.

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Conversely, don't let a bad carpet or ****ty paint color drive you off of a house you otherwise love. Those can be pretty cheap to replace (espeically if you're willing to put in the work yoruself) and can end up being something you can do to increase the value of the house when you sell.


On a local note: a lot of places around here used to be apartments and are starting to 'go condo' because of the market.


Another local note: if you aren't afraid of a drive, you can reduce yoru costs and get a much bigger house by NOT buying in Madison or Dane County. Taxes in this county are very high compared to neighboring counties (and even getting out of Madison will lower them somewhat) and the property values are even higher (owing in part to the fact that the city of Madison only has a few remaining acres of developable land inside its borders and is now completely surrounded by other incorporated municipalities)

kornkob said:

Make sure you visit the neighborhood the place is in (And this applies to renters too) at least 2 times without the realtor: Once on a weeknight and once on Saturday night, both after dark. The character of a neighborhood can drastically shift from daytime to night.

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Also, check out the snowbanks. In certain areas of Madison they contain used furniture, clothes and other renter detritus that is eagerly awaiting spring thaw to blossom.

If you can hack out a living wage, Madison is a great town.

Get rid of all of your U of M logo apparel.

olllllo said:

Get rid of all of your U of M logo apparel.

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Luckily I don't have any. They've just been paying the bills the last 2 years, I really haven't enjoyed my time at U of M to tell you the truth. Thanks for all the input guys, korkob, looks like you'll be hearing more from me in PMs if we start really considering this.

Thanks all,

Matt