Here's to NOT being House Poor!!

So we were talking to our realtor the other day about the price range of the houses we've been looking in. We worked it out so the price range we've been looking in is equivalent to what we're paying a month in rent right now. She told us to talk to our mortgage lender to find out how much more a month 50K would work out to be. She did a quick calculation based on the average loan rates and it worked out to be 75 bucks more a month. So for 150 bucks extra a month we could be looking in a 100K higher price bracket. I was surprised the numbers worked out like that! Of course that's not factoring in taxes or insurance or the jump in the down payment at that higher level ... but my advise to you is talk to your mortgage lender and work out how much a month different price levels would be. Maybe 50K is the difference between a fixer-upper and your dream home and it's only 75 bucks more a month!!

The most important thing is to figure out what you're comfortable with because you certainly do not want to be house poor. People love to say ... OOhh you don't want to be house poor and have to eat ramen noodles for dinner every night. But being house poor is much more then that. Yes there's no more going out to eat or movie dates or vacations, but what if you move in and a month later your fridge breaks or the roof starts to leak?! It's a good idea to make sure you have some wiggle room for things like that. It's true that no one expects the Spanish Inquisition, but with the proper planning they can expect Murphy and his law! 

With that being said I leave you with this awesome song called 'My Fridgerator Broke'. Do we have any Hell Cats fans out there?? Yes, that cheesy cheer leading show that was on the WB for one season. Anyway the sisters on the show (fun fact: they are also sisters in real life) sing this awesomely hilarious song about their fridge breaking. Check it out below ... I even included the lyrics so you can sing along! Enjoy! = )

Got tuna fish in my pocket,
butter up my sleeves,
eggs tucked in my dungaree’s,
socks are full of cheese.

You might call me crazy,
but this is not a joke,
my fridgerator, fridgerator, fridgerator broke.
my fridgerator, fridgerator, fridgerator broke.

Why should I throw my food away?
Why should it go to waste?
That would not be clever,
not be in good taste.

I’ll stand out in the cold all night,
it’s tough but I’ve adjusted,
my fridgerator, fridgerator, fridgerator busted.
my fridgerator, fridgerator, fridgerator busted.

my fridgerator busted,
but I won’t sing the blues,
carrots are my curlers,
potatoes are my shoes.

Bacon in my cowboy boots,
in my hat’s the beer,
pickles tucked behind my ears,

a roast strapped to my rear.

May I raise my armpit,
and offer you a coke,
my fridgerator, fridgerator, fridgerator broke.
my fridgerator, fridgerator, fridgerator broke.

 

and a house hunting we'll go ...

So I saw a Chevy commercial last night that perfectly describes the adventure my husband and I had Sunday morning during an outing with our realtor. I'm sure you've seen it - it's the one where a very pregnant wife and her husband are looking for an apartment. They're at the first place and say the Kitchen is too small. Then they get in their sporty looking car and go to 3 or 4 other places - one smells like sea bass, one has some flooding, one is super close to the building next door, and so on and so forth until they wind up back at the first place and say "It's perfect. I love the kitchen." lol!

We started out at this house in Howell, NJ - 4 bedrooms, 3 full baths, fireplace in the living room, rocking chair front porch, master suite with a private balcony, on almost an acre of land! Initial down side is that the house is a short sale, which we're kinda leery about, and its a good 45 minute commute for both of us. But it just seemed so awesome we couldn't pass up taking a look at it. So at 9am my husband and I pulled up in front of the house. You first walk in to the kitchen/dining room ... they were great, hardwood floors, updated appliances, lots of storage, full bath off of the kitchen (which I thought was a little odd) and an entrance to one of the bedrooms (which we didn't get to see because the seller's dog was in there). Ok on to the living room ... needed a paint job, fireplace needed some cleaning up, two big closets on either side of the living room - one of which held the washer/dryer (strange!!), water stains on the ceiling (red flag?!), but hardwood floors, 4 ceiling fans, huge ceilings, two sliding doors on either side of the fireplace leading to the humungous backyard. So we walk upstairs into a very wide hallway. We check out the first bedroom - good size - until my husband points out that there's no closet! Hmmm strange. Ok on to the master - very big, awesome master bath with jacuzzi tub and separate shower, private balcony looked nice but needed to be cleaned, also no closet (what the heck?!). Same thing with the 4th bedroom - no closets!! I don't get it. Who builds a house with no closets?! And there was a weird little mini room, roughly 3' by 7' next to the master. The owners were using it as storage cause what else could you use it for?! Overall not bad - minus the weird lack of closets and potential water damage in the ceiling it was an ok house.

So after the Howell house we moved on to Freehold ... that's where the adventure really started! We saw three houses in Freehold ... each more ridiculous then the last. The first house we arrived at was suppose to be vacant ... but there were toys in the front yard and a pile of work shoes on the porch. Our realtor knocked but no one answered, so she used her magic key thing and opened the door, she said Hello a few times but no one replied so we stepped in. The house was clearly being occupied - there was furniture, pictures on the wall, and food in the kitchen. We got halfway through the hallway into the kitchen when we heard the TV come on upstairs ... that's when we decided we weren't in the mood to get shot at and got the heck outta there!!

The next house was also vacant (this one really was though) and bank owned. The first thing we noticed when we pulled up was the lack of off-street parking. We make our way on to the porch, noticing the chipped paint on the banisters and the holes in the floorboard. Our realtor opened the door and BAM we get smacked in the face with the smell of cat pee. Yes that's right ... cat pee ... we had opened the door to a cat hoarder's house!! We made our way into what I'm assuming was a dining room before I couldn't take it anymore and we ran out of there. Before we got in our car I took one more quick look at the house ... thinking I'd recognize it from an episode of Hoarders. Matt Paxton if your reading this let me know if you ever went to a house on Institute Rd. in Freehold!!

Alright so on to the last and finale house of the day. I was pretty excited about the this one - it was in a really pretty neighborhood and it had this awesome Victorian style feel to it. We pull up and it's clearly been neglected for some time. The wrap around porch and shutters needed a paint job and the railing needed some fixing up. We walk in and noticed these gorgeous wide-plank wood floors that were in pretty good condition! We then made our way into the living room with a gorgeous marble fireplace, then on to the dining room - also with a marble fireplace. So far so good. Out of the dining room into the kitchen ... and I spoke too soon ... the ceiling was coming down and there was fiberglass and insulation everywhere. We took a quick peak outside onto the nice sized deck over looking .. the garage! There was no yard whatsoever! We made our way back down the hall and (even though we weren't going to buy the house) upstairs to take a quick peak at the bedrooms. Three pretty good sized bedrooms, one more marble fireplace, and a full bath - complete with one of those awesome claw feet bathtubs! It was a shame the previous owner had let the house get like that. You could really imagine how awesome it was back in the day. But this would have been too much work for us and a back yard is on my need list!

So after seeing those three houses the Howell house started looking pretty darn good again! lol! This was only the second time we've been out and despite the craziness that ensued we had a pretty good time! We now know that when a listing says, "needs some TLC", it means it needs more then just painting and updating, Vacant doesn't necessarily mean vacant, and closets are not standard in every house! You live and learn.

Five things I hate about researching houses online

So after almost 6 months of looking online for houses my pet peeve list for these online listings is pretty big!! I've narrowed it down to my all-time top five most annoying things about online listings that I absolutely cannot stand!!! I'm sure a lot of you house-hunters out there will agree with me on this and hopefully you'll find solace in the fact that someone else besides you thinks they are annoying. Feel free to add to my list in the comment section!! Maybe we'll strike a cord with some of these agents out there and get these things fixed ...

1) PICTURES - The entire picture aspect of these listings just bug the window treatments out of me!!! Don't they know - no pics, no looks!! Even if the house description is out of this world and the house is only 12 bucks with a $10,000 government grant option ... if I can't see the house I'm moving on (ok maybe if the house was 12 dollars I'd take a quick peak)! And what is it with these listings where you see the outside of the house and the rest of the images are of the train station, or the nearby waterfront. I'm happy to see that if I took mass transit to work there is a train station very near by - but if the house is a P.O.S. the train isn't going to do me much good. Ooh and another thing .. So you find a cool looking house and you click on the listing for more info and see that there's 18 pictures with it. If you're like me you get super excited, until you click on the pictures and realize it's just the same 6 pictures posted 3 times. What is up with that?? And the quality of some of the images? They're awful!! It's great that there are 10 pictures of your listing but if I can't make out a window from a fireplace what good is it?! There should be some kind of requirement where you need to have at least one (decent) picture of all the major areas of the house - the front, the kitchen, the living room, one bedroom, one bathroom, and the backyard - before you can post the listing online.

2) # of bathrooms - I hope we can all agree on the fact that a half bath, which consists of just a toilet and a sink, doesn't count as a full bath. If it counted as a full bath it would have a tub and/or a shower AND BE CALLED A FULL BATH!! If you say in the description that the house has 1 and a half baths then you should not put the number 2 in the bathroom section. That would be a lie. You wouldn't say a house has 4 bedrooms when in reality it only has two bedrooms and two closets. It's misleading and doesn't make me want to continue reading your listing because if you don't know the difference between a full and half bath then I'm not so sure I want to buy a house from you.

3) Lack of info in the breakdown section - I absolute hate it when I click into a listing that says 4 bedrooms/2 baths and doesn't give the square feet of the house or the lot size. Ok 4 bedrooms are great but if its in a 500 square foot house I'll probably pass. Or when it says 3 bedrooms and "--" in the bathroom section. Does the house not have a bathroom? Why would you put your listing up if you didn't have all the information on the house to begin with? That's not a good way to sell houses!

4) When the street view isn't actually of the house your looking at - Ok this relates specifically to the Trulia website since they're the only one who has this option. When it works I love it - saves me from having to go to Google maps to see if there's a street view available for the house. But when it doesn't work it's so frustrating! I was looking at a listing a couple of weeks ago and click on the street view link - it took me 20 minutes of looking to realize that the house I was interested in was further down on the street and the little orange Google map dude wouldn't go down that far. So why put it on the website and give me hope for nothing?! I understand that its at the discretion of Google whether there is a street view of the house or not, so if Google map doesn't have a street view option then just put NO STREET VIEW.

5) When the "days listed on ..." isn't correct - Now because I'm a listing junkie (Hello, my name is Elizabeth and I'm addicted to looking up houses online) I've signed up to get automated emails from a million, give or take a few hundred thousand, different companies. I know what you're thinking - excessive? - but you'd be surprised the variety of houses I get that way! Any who ... one morning I'll get an email from Weichert with a listing for 123 Main St. that says it just came on the market, then I'll go to Zillow and it says it's been on the market for 75 Days, then I'll go on Trulia and it says 156 days! MAKE UP YOUR MIND!! The number of days a house has been on the market is actually pretty important. It lets you know that perhaps there is something wrong with the house that they're not letting on, or maybe they're going to lower the price soon, or if they just came on the market they probably aren't ready to budge on the price anytime soon.

Ok I'm done complaining for now! Let me know what you think about my list and tell me what some of your pet peeves are!!

You can't always get what you want, but if you try sometimes, well you just might find, you get what you need ...

The next step in the house hunting process is narrowing down exactly what you're looking for! I suggest taking some time and getting your Need list and your Want list together. Depending on how many houses you've looked at on line by now and how many house buying shows you've watched on TV this may either be a cake walk or ... whatever the opposite of a cake walk is!

Take some time and sit down with yourself and your house buying partner (if you have one) and discuss whats important to you and what would be nice to have but you could do without. Not only will this open the lines of communication between you and your housemate (maybe you are thinking a 2 car garage is a deal breaker but they don't mind just having a driveway) but it will also help your agent help you find your dream home (believe me its one of the first things they'll ask you).

To give you an example, here is what's on our Need and Want lists ...

NEED
3+ bedrooms
Good sized backyard
Off street parking for 2 cars

WANT
1.5+ bathrooms (boarder line between the want and the need list)
Updated eat-in kitchen
Separate dining room
Wrap around front porch
Garage
Deck in the back
Fenced in backyard
Pool
Washer/Dryer

Of course we would love to find a beautiful Victorian style house with a wrap around front porch and 4 bedrooms with 3 baths, a master suite and laundry room, with a gorgeous deck outside and an in ground pool ... all for 150K! But the chances of that happening are slim to none. We have to be realistic and making those lists really help!

Feel free to post your lists in the comment sections. I'd love to read what everyone else is looking for out there!!

Let's start at the beginning, a very good place to start ...

So you've decided to buy a house ... now what??

The number one absolute most important thing is to first find out how much money you're willing to spend on your dream home, and how many money a mortgage company will give you (remember these two numbers might not necessarily match). Almost every real estate search site has a "calculate your mortgage" section that I strongly suggest you take advantage of.

*SPOILER ALERT*
Make sure you select the "factor in taxes and insurance" button otherwise your monthly payment will be wrong and you could end up be looking in a price range way above what you can afford. I live in NJ and with taxes and insurance we're looking at an additional 400-800 bucks a month depending on the area (I know I was taken aback too). That's a humongous difference when calculating your monthly payment, and intern the total price range you can afford.

A good mortgage calculator I can suggest is the one on Zillow - CLICK HERE - start with the number you think you can afford, add in your down payment, adjust the tax % accordingly ((what I did was I pulled up some houses for sale in the area we were looking at and calculated the property tax percentage and then averaged that number. In the Monmouth/Middlesex area of NJ we're looking at around 4.3% tax. Remember this is a rough estimate of the taxes you'll be paying. There are a lot of factors that go in to how the taxes are calculated and each house is different but for this rough calculation it'll work fine)) and waalaa ... your roughly calculated monthly payment pops out! If you think that monthly total is too much or too little, just play around with the home price you entered until you get something you're comfortable with. This will be your base price.

When you do begin your search, I always suggest you look around 20-25K above whatever that base price is. You can always negotiate the price down. People are always saying its a buyers market and everything in negotiable. They say it because its True!! Especially now-a-days! The buyer has much more control over what they pay. There are some houses on the market for years and when a seller gets to that point everyone is willing to work with you. Once you get to that point of making an offer your agent and the listing agent will be able to tell you how flexible the sellers are and how much they think you can push the bottom line price.

Another part of this is going to get pre-approved for a mortgage. Everyone's credit history is different and it's best to go get pre-approved for a mortgage to confirm the number you're thinking of is actually what you'll be able to get. Now remember sometimes those numbers are different ... you might be thinking you can afford in the 200K-225K range but the bank approves you for 275K! Don't run right out and bump up your base price now. Remember mortgages don't include many monthly bills like your cable, cell phone, heat, electric, netflicks, etc. You need to make sure you can cover all your normal expenses including your new mortgage payment.

For those of you who rent right now and have a set payment deducted for rent each month, calculating things will be easier for you as you most likely already pay utilities. If you are living with a family member or friend and do not payment rent I would work up a list of other expenses (such as: gas, heat, sewer, electric, etc.) so you have a good idea on exactly these will total a month. All it takes is a few minutes of sit down time with a home owner in the area you're looking to buy in to have them give you a good idea of what you'll be paying.

We'll go more in depth on mortgage options later on but for now this will give you a good starting point!!