"100% of people who do not save money do not have any!"--Dave Ramsey

[Ecky]

Originally Posted by redpoint5

The vice president of the previous company I worked for would respond to my very well formed emails; k thx. Anyone typing with a keyboard has no excuse for k thx. Anyone with a flip phone has no excuse for k thx.

Yeah?

[Xist]

On behalf of everyone I would like to thank you for taking the time to write that.

[JSH]

Originally Posted by Xist

So yes, if I seriously want a house, I should apply for a mortgage...
.

If you get serious about buying a house you should get preapproved for a mortgage. No realtor is going to take you seriously until you can show you have the capability of buying a house.

However, don't fall into the trap of asking the mortgage broker how much you can afford. They will approve you for mortgages way to high that can be difficult to repay. They don't care if you pay because they don't hold the mortgage they package it and sell it.

I remember when I purchased my first house I was making $45,000 a year. The bank wanted to preapprove me for $250,000! That would have been almost 45% of my gross pay going to the mortgage (+ PMI, Insurance, Property tax, etc)

Figure out what you can afford to pay and then get approved for that amount. (The old rule used to be 28% of gross pay)

[redpoint5]

I thought the rule of thumb was 20% of gross pay is what should be spent on housing? 30% seems reasonable to me too.

I was approved for $220k mortgage with a ~$1250/mo payment on a 30 year fixed (includes taxes/insurance) on a $40k income. That was 38% of my gross, but I was putting 20% down and had 2 roommates, which entirely offset the mortgage, taxes, and insurance. The only money I've put into that house in the past 10 years was the initial 20% down ($45k). That averages out to $4,500 per year to own the house and build equity.

All that said, I need to replace 2 fences, a deck, reside the house, and replace the south facing windows. Probably $70k in expenses there if I had someone do all the work.

[oil pan 4]

Yeah I think the VA wants you spending a max of 37 or 38%.

[Ecky]

Regardless, you should get preapproved for a mortgage, and then go talk to a realtor. It's a potential bargaining chip that you are preapproved for "only" a certain amount, so I don't see it as an advantage to being preapproved for more than you can afford.

Definitely shop around. You can get preapproved from several companies, and then decide later which one to go with. Some will have more red tape, some will have lower rates, etc.

[Xist]

Zillow notified me the owner dropped the price of the blue house by $14,000, which is almost 18%.

It is still $125 per square foot. Another $14,000 and we can start negotiating?

[redpoint5]

Originally Posted by Xist

Zillow notified me the owner dropped the price of the blue house by $14,000, which is almost 18%.

It is still $125 per square foot. Another $14,000 and we can start negotiating?

I've brought this up before, but you don't start negotiating by waiting for someone else to reduce the price to what you want. You propose the terms, and they take it or leave it. I'll offer 50% of what someone is asking without blinking.

Effective negotiation requires coming from a solid place, which means you're able to quickly and easily fulfill the terms you propose with regards to price and payment. With real estate purchases, that means being pre-qualified at minimum.

[Xist]

What would it take to make any 520-square-foot house nice?

[oil pan 4]

Offer 2/3 to 3/4 of what they want.

When I sell something and get offered 1/2 I will block or ignore that person because I have priced the item pretty close to what I want for it and that person doesn't have enough $ to play.

When I was selling solar panels. I had to sell them for $74 each to break even.
Selling solar panels taught me alot about the kinds of people who want solar panels.
About 95% fell into at least 1 of 3 categories:
They're broke
And/or
Don't have the first clue about solar powering anything.
Don't understand math.
And they just want free electricity.
Solar and real estate are very expensive addictions.