Updated on 05.21.15

10 Tips for First-Time Home Buyers

Trent Hamm

new homeowners

In the summer of 2007, my wife and I purchased our first home. As a first-time home buyer, I knew we needed to spend a considerable amount of time researching our purchase. So that’s exactly what we did – we read as much as we could, educated ourselves on the local real estate market, and explored every aspect of the home buying process. But even then, we still made a few rookie mistakes.

Of course, it’s easy to see that now – after the fact. You know how the saying goes: “Hindsight is 20/20.” Although we are still happy with our purchase overall, there are definitely a few things I wish we would have done differently.

Valuable Lessons for First-Time Home Buyers

But you live and you learn. And in the end, that’s all anyone can do. With that said, I wanted to share some of our mistakes and other things we’ve learned since we bought our house, in case they might prove helpful to someone else going through the home buying process. Looking back on my own experience, here are some tips I’d recommend to any first-time home buyer:

Start saving right away

The earlier you start saving for that down payment, the easier it gets. We didn’t start worrying about it until it was too late, and we had to get a mortgage for more than 80% of our home’s value. If we had been on the ball even two years earlier, we wouldn’t have had to do that.

If you want to avoid paying private mortgage insurance, or PMI, in most cases you need to save up at least 20% of your future home’s value to use as a down payment. That’s easier said than done, but it becomes a much more realistic concept if you start saving right away.

Even if you aren’t ready to buy in the foreseeable future, you can put yourself in a better position by stashing $50 or $100 per month into a new home fund. The bottom line: The sooner you start, the better.

Don’t rush things

Because of the timing of my wife’s pregnancy, we felt rushed into our home purchase. With a baby on the way, we knew our apartment would soon be exploding at the seams. Although I’m happy with our home purchase, I wish we hadn’t rushed it so much.

There are lots of factors to consider when buying a home, and you can often benefit by searching in different areas and neighborhoods before you pull the trigger. I feel as though we settled in a way, and that’s one mistake I still regret.

Build your emergency fund

When you’re a first-time home buyer, it’s easy to be shocked by the many “extras” that appear in your monthly budget. Things that didn’t exist before – like larger utility bills, home repairs, and lawn maintenance – start adding up and making a huge difference in your bottom line.

If you want to be as prepared as possible, build your emergency fund for several months – or even years – before you commit to the home buying process. The money will be there when you need it that way, which will make the entire purchase a lot less stressful.

Price-shop for a mortgage

The easiest way to get the best mortgage rates is to shop around as much as you can. When we were going through the home buying process, I was surprised at how much lower (and higher) mortgage rates from different firms could be.

We ultimately chose the lowest rate out of three and went with our credit union. However, I really wish we would have taken the time to explore different loan options, as well as rates from at least a few more mortgage brokers. Saving just a half a percentage point on an average-priced home could lead to tens of thousands of dollars in savings over the years.

Pay attention during the home inspection

During the home inspection process, we thought we did everything right. We followed the home inspector through every room. We asked questions. We took notes. One thing we didn’t do, however, was check things out for ourselves.

Unfortunately, in our case, our failure to explore the entire property meant that we overlooked an extremely old and almost unusable hot water heater. We’ve since replaced it, but we might have been able to ask the seller for a credit had we known at the time. The bottom line – always inspect the home on your own and pay attention to the details.

Get a second (or third) opinion

When you’ve fallen in love with a house, it’s easy to overlook things that may not be quite right. Unfortunately, those “love blinders” can cause expensive mistakes if you fail to notice something wrong with the property.

That’s why it’s important to bring a family friend or relative along. Since they aren’t buying the property themselves, they’re more likely to see it for what it is. So get a second or third opinion from someone who isn’t blinded by love goggles. Different eyes spot different things, and friendly eyes will tell you the problems they see.

Shop around for homeowners insurance

It can really pay off to shop around for the best homeowner’s insurance policy you can find. And don’t be afraid to move your other insurance policies and bundle them together — most insurers offer a generous discount if you package both your auto and homeowners policies, for instance.

But your search shouldn’t just be for the cheapest policy you can find; this is likely the biggest investment you’ll ever make, so you want a high-quality policy that will serve its purpose if you should ever need it. So don’t shop just on price alone – consider the quality of the policy and its coverage options. If you ever need to file a claim, you’ll be glad you did.

Another way to save some money on your homeowners insurance is to evaluate the actual value of your house’s contents, and insure them accordingly. At first, we went with a default amount suggested by our insurance agent, simply because we didn’t know any better. Later, having actually calculated the value of everything in the house, we adjusted that figure downward quite a bit. Remember, don’t count irreplaceable items – you wouldn’t replace them anyway, and they have no real replacement value.

Don’t go furniture shopping the day after you move in

When you’re a first-time home buyer, it’s easy to forget that your new home will bring with it a whole new set of expenses you’ve never had to worry about before. So before you go on a furniture-shopping spree, take some time to figure out what your new budget might look like, and what you actually need for your new home.

If you take some time and shop around enough, you might even find an awesome furniture sale or liquidation, or discover some used furniture on Craigslist that suits your needs perfectly. Don’t rush into a furniture purchase. You have plenty of time, so use it.

We had a bunch of cheap furniture from our college days at our old apartment that we didn’t bring with us. By pure luck, we happened to stumble upon a liquidation sale at a furniture shop and outfitted our living room very cheaply, but it was really a mistake to decide that we needed new furniture for our new house. Upgrade it later on – you can have a few empty rooms for a while. Save up until you can afford what you actually want instead of buying furniture just to fill a room.

Offer to help others move for years in advance

How does this help you? Well, imagine over a three-year period that you help 10 different families move. When you move, you can call any of these people to help you move — and five families can unload a truck and unpack boxes at an astounding rate.

Our big mistake wasn’t the help we received, but how I managed it. Don’t have everyone come and help you at once. Ask two friends to come one day and two friends to come another day instead of having them all come at once — you’ll be far more productive that way.

Know what you can change, and what you can’t

When you buy your first home, the whole process feels daunting. The idea of spending thousands of dollars to replace or update old or unsafe systems or outdated appliances is especially unsettling and can seem like an insurmountable obstacle.

But every home has some issues. Some of them are things you can live with, while some are things you can’t; some are things you can change, and some are permanent features.

The number-one thing you can’t change about a house is its location, so remember: When you buy a home, you’re not just buying a house, you’re buying the neighborhood. Explore the surrounding area before you submit an offer and fully commit to the purchase.

Meanwhile, other problems can be fixed, or at least endured until you are able to fix them. For example, that problematic hot water heater was something we could change about the house. But if we had let that issue scare us away from buying it, we might have missed out on the chance to live in a family-oriented community with great neighbors.

More Tips to Improve the Home Buying Process

Your home will probably be the most expensive purchase you ever make. That’s why it’s important to research every aspect of the home buying process – and make sure you do things right from the start.

Part of that process involves getting your own financial house in order. Here are some steps you should consider taking as you prepare your finances for the prospect of a mortgage:

Make sure your credit is in good shape

If you want to qualify for the best mortgage rates possible, it’s essential that you get your credit score in tip-top shape. If your credit score needs work, there are plenty of steps you can take to improve it. Some of them include paying down debt, diversifying the types of credit you use, and paying your bills on time, every time.

Pay down your debts

Not only can paying down debt improve your credit score, it can increase your chances of getting qualified for a mortgage — and improve your financial well-being, too. Once you owe less money, you should have more expendable income each month that you could save for your new home’s down payment – or for repairs or upgrades once you move in.

Paying down your debts can also help you qualify for a mortgage, since lenders prefer to have your total debt obligations — including your new mortgage — to represent no more than 43% of your income.

Avoid new debts

Another piece of the puzzle while you’re preparing for a mortgage is staying away from new debts. Remember, any monthly obligations you have could stand in the way of taking out a mortgage for the home you really want to buy. As you prepare to buy a new home, try to stay away from taking out any new loans, including car loans. You’ll be in a much better place to get your ideal mortgage, and ideal mortgage terms, if you are debt-free.

Resist the urge to buy all the home you can ‘afford’

This one is really important. When you first apply for a mortgage, the bank may be willing to lend you more than you really need. However, there are a lot of really good arguments in favor of buying less house than you can afford.

For example, the lower payments that come with having a smaller mortgage can be beneficial when you’re getting ready to start a family or saving for retirement. Meanwhile, a smaller home can mean less money needed for repairs, utilities, and upkeep.

Regardless, you should only buy as much home as you need and only spend as much as you’re comfortable with. Who cares what the bank says you can afford?

As intimidating as it can be, buying your first home is a wonderful, exciting experience — especially if you educate yourself about the process beforehand. Do the readers have any more suggestions for things they’d do differently with their first home purchase?

Loading Disqus Comments ...
Loading Facebook Comments ...
  1. Ben in Indiana says:

    I had the same problem with a percolating hot water heater, and after having the pressure valve pop, the plumber informed me that the water temp was set too high. I never changed it from where it was set before we moved in, but after lowering it the problem went away. I don’t know if it will help, but I thought I’d pass it on.

  2. Brendan says:

    What are your favorite home buying books?

    I am most likely to buy a condo, so any that focus on condo-specific issues would be most appreciated.

  3. KC says:

    Do you (or any readers) have tips for buying homes long distance? I’m moving about 800 miles away. I’ve been once for a weekend and looked at some homes then (one we are seriously interested in). I’m going back in a month to look again. Of course I’m looking at MLS listings on the internet and sites like zillow and realtor.com. But I’m about to drop $300k on a house I’m going to spend the rest of my life in when I’ve sent maybe a total of 7 days in that city. Any suggestions on how to make the right choice?

  4. Anne K says:

    We JUST moved into our house one month ago. I think we really lucked out with so much, but there were a few other things we should have insisted upon. The previous owners took their closet shelving and the drapery hardware for all the upstairs bedrooms. In PA, anything attached to the walls is supposed to STAY in the house. So we just had to spend money on shelving and curtain rods, plus tomorrow I’m going out with a coupon for Lowe’s to get shades that again, were supposed to be included in the sale. The previous owners did leave their recycling and the shower door that we requested they remove. That’s our fault; we did a walkthrough of the house before settlement and didn’t pick up on it. At settlement we were so involved signing the mortgage papers that we stayed out of the heated discussion between the sellers and our agent about these problems. Also- a big kitchen was my dream, because I love to cook. I didn’t pay enough attention to the size of the drawers and cabinets which are actually smaller than the drawers and cabinets in our old apartment. The kitchen was not designed for a real cook but must have been great for someone who baked an occasional batch of cookies out of a bag or a family who ate frozen dinners and takeout. The kitchen will be expensive to change around- I’m starting to save for that already.

  5. This is a great list Trent.
    On a side note I purchased a 3-month old used set of Microfiber furniture from a poor guy who broke up with his girlfriend shortly after moving in with her and had no place for the furniture he just bought.
    His loss was my gain – $800.00 total for Sofa, Loveseat, and chair that is still on warranty.
    His original receipt was tucked in with the warranty information – $1700.00 and change.
    I stil smile when I tell people the story.

  6. michael says:

    If you’re in the southwest, have a reputable person — preferably an AC professional — check the AC units before buying. Mine BOTH died soon after buying my fixer-upper in Las Vegas (and being assured that they would last ‘at least a few more years’ by the inspector my agent recommended). That’s $6000 that won’t be paid off for another year.

  7. Grant says:

    I saw this article is the Wall St Journal about house buying in the US. http://online.wsj.com/article/SB122325772150706655.html

    As an Australian observer I would be interested in your comments on my compatriots claims.

  8. Jay says:

    I’d also like to mention, if it isn’t included with the home inspection already, to get your sewer pipes scoped. There would be nothing worse than moving into your house and a few weeks later finding out you have problems with drainage and backups. This coming from a former plumber who can’t count how many times new home buyers called us after getting their place. Very expensive and intrusive for the serious plumbing problem fixes. Trenching and re-routing gets messy. There are also no trench systems, but again they are still pricey and holes will have to be made regardless.

    Also, really take a close look at your copper water lines that are visible. This is especially necessary if you are in an area with high electrolysis, like West Texas. Go look at the water meter out in the street making sure all the fixtures are off. If it is spinning, you might have some leaks.

    PS: Water heater, not “hot water heater”. That’s redundant. You’re heating cold water. :)

  9. jae_em says:

    I’m looking at purchasing a home (I’ll be a 1st time buyer), and this list will definitely be handy! Thanks!

  10. K says:

    Get serious about saving sooner. I agree. This is the most important thing. Financing more than 20% makes you pay more either in the form of PMI or extra interest from a split loan. We put down closer to 30%. You also need cash for the closing costs.
    Don’t rush things. Maybe…. We weren’t even serious about looking yet and went to an open house, and we ended up finalizing an offer on that very house within 2 weeks. So give yourself enough time to wait for the right house, but if a good one comes along, don’t hesitate either.
    Spend more time shopping around for a mortgage. Yes. We went with lending tree and got a lot of good rates, but a year later the credit union had lower rates advertized, so make sure you look around.
    Evaluate the house contents more carefully. A professional inspection should catch most of these. The one thing I wish we looked at was the size of the garage. It said 2 cars but what they mean is 2 small cars or 1 mid-sized and zero large vehicles. This is not something we anticipated and now have to park in the driveway.
    Have an additional set of friendly eyes look at a house with you. Great idea. We had our parents and a couple good friends also look at the house with us.
    Another thing: evaluate whether you really need an escrow account. We have the discipline to save on our own for insurance and taxes, so we are able to save several thousand dollars a year through discounts and interest gained. Don’t let them bully you into doing this automatically unless you want the convenience.

  11. Kevin says:

    Trent – if I were you I’d look into a tankless water heater. They are dropping in price in recent years and the savings on fuel will pay for any difference in a couple years time I would bet.

    I’ll be buying my 4th house soon – probably next spring, so I’m a bit of a veteran at the process, so I agree these are all good ideas.

    For first timers – I would definitely agree not to rush things. You may find a house you love early on in the process, but keep looking around as you may start to notice some features your “dream house” doesn’t have that you might miss out on.

  12. Jennifer says:

    I strongly recommend a thorough, formal inspection by a qualified home inspector (not someone who has a stake in seeing the deal go through) as well as a home warranty policy. Home Warranty policies can usually be negotiated in the sale, at the expense of the seller.

    In response to KC’s post above, if I were moving to a new city I would definitely plan to rent for the first 1-2 years just to make sure I was in an area where I wanted to be living. This is especially true if it’s a place you intend to live in for the long term. I realize that it’s not ideal to throw away money toward rent, but that can be less costly overall than selling a year or two later because you aren’t happy with where you decided to buy.

  13. a.k. says:

    The only thing I’d add is to make sure you have a well-padded emergency fund — at least 3 months’ living expenses saved up on top of your down payment, closing costs and moving expenses. It’s practically inevitable that something big will need to be replaced in the first year you live in your home. (For us, it was a new hot water heater, plus servicing/repairing the boiler after years of clear neglect.) Without a cash cushion, that would have been rough credit card debt to take on.

  14. Jen says:

    My favorite house-hunting anecdote: when I was about 14 my family was viewing a house during a heavy rain, and because I was too cool for those doofy-looking booties I was walking around in my socks. I discovered the leak in the basement when I stepped on some wet carpet (ew). The fully-shod grownups hadn’t noticed. If you’re house-hunting on a rainy day, take advantage of your friendly feet!

  15. Brittney says:

    The only thing I could think to add to the list is to research utility companies before you move, and make sure the seller gives you the account information so you can easily transfer the gas, electricity and internet instead of paying for a new account. The first night in our new place we were casually calling companies and found out our electricity was scheduled to be turned off that night. Whoops!

  16. BigMike says:

    Trent, I am glad someone mentioned the tankless water heater. I did the numbers and it didn’t work for me. I calculated the yrs that we plan to still be in the house and also the add’l costs of installing it. You have to install full stainless steel venting. It was going to cost well over $1200 in my case. So I went with a gas STATE that I had installed by a local HVAC dealer. It was less than 1/2 the cost of the Bosch tankless.

  17. Alvin says:

    Also remember that any cash bonuses or rebates like closing costs financed into the loan, “free” HOA fees for a condo, and other monies all go towards a higher final sale value.

    A higher amount can result in higher local taxes.

    We made this mistake when we bought our first condo two years ago. We also went with an 80/20 mortgage to avoid PMI. We gladly accepted the “free” HOA fees for three years, “free” property taxes for three years (in the form of a check), and included the parking spot and closing costs all into the loan.

    Luckily, you can ask the county to reassess your place for a lower tax bill if your place or comparable places have depreciated (like ours). But it’s better to go in with a low final sale value from the start!

  18. Lucky says:

    You should help other people move just because you’re not a jerk, not because you’re expecting help in return. Behavior like that is transparent, and people WILL notice your attitude.

    Over the years I’ve helped everyone I know move, just because I like helping people out. Of course, it doesn’t hurt that I enjoy picking up heavy things in one place and putting them down somewhere else…

    During my last move, I found out just how much it sucks when the movers don’t call and don’t show up because it’s Friday night. Thankfully, most of my friends showed up the next morning to help.

    Interestingly enough, and for entirely unrelated reasons, the ones who didn’t show aren’t my friends anymore. You CAN judge a friendship by whether or not they’ll help you move.

  19. Lurker Carl says:

    Tankless water heaters. Gas units are expensive to install and most electric units will not heat water very well. Most installations don’t save much money unless your home’s plumbing fixtures are located in close proximity AND the incoming water temperature is above 60 degrees F. Otherwise, you’re wasting energy heating water in the pipes that never reach the fixtures. And, particularly with electric units, cold incoming water requires lowering the flow rate through the heater to obtain sufficient hot water temperature.

  20. Dooley says:


    How much would you recommend saving up before you buy?

    I’m still in college so I’ve got a few years, but I’m starting to try to calculate how much I want to ideally start squirreling away for various things when I graduate, so I have a better idea of what salaries I should be hoping for and just how frugal I need to be with whatever job I end up getting.

    I’m kind of clueless as to what sort of goal to set for home savings…

    I definitely don’t plan on settling down for quite a while, but I’d like to have a decent down payment saved up by the time I am that far.

  21. beth says:

    Definitely some good tips in the comments so far. I have to agree with the recommendation to rent for a while when moving to a new place across the country. We did pretty well buying right off the bat, but we could’ve done better.

    I would also recommend getting a home warranty. As a buyer, you can almost always get the first year paid for by the seller, and renewing runs a few hundred $$ (I think ours here in Vegas was $450 for a pretty big house). We paid for ours with the first busted air conditioner, stuck toilet, and hot tub heating element.

    And definitely shop around. We had a buyer’s agent, which I would wholeheartedly recommend, and we wore him out with 30 or 40 houses before we decided (squeezed in to weekend sprees as we flew in to town to house shop). He had great insight in to neighborhoods, shopping, and the market.

  22. Allison says:

    @ Lucky (comment 12)

    I don’t think Trent was saying that you should help others move so that you can automatically assume they will reciprocate when the time comes around. I believe the point he was trying to make is that if you demonstrate that you are a good friend and help others move during their time of need, it might be more likely that they would be willing to help you when it comes your turn to move–not that they should feel obligated to do so.

    I don’t really picture Trent saying “hey Bill, we helped you move 2 years ago, so pony up, it’s my turn now”–he does not come off that way in his routine postings, so i think it’s unfair to jump to that conclusion and insinuate that he’s transparent like that.

  23. Pam says:

    KC-comment #3 above
    My husband and I have bought 2 houses where we’ve moved from a distance. The 1st time, we made so many mistakes and really had buyers remorse. The house was dark and gloomy and it was on a huge lot and the yard work almost killed us. The seller was not honest and there were problems with the house that he didn’t disclose. We had a hard time selling the house and we lost money. This was back in the 1990s, before the housing market was so scary.

    The next time, we were smarter. I bought around 12 books about home buying, mortgages, home buying mistakes, home inspections and we read them to educate ourselves. I started subscribing to the newspaper in the city we were moving to so I could get an idea of what areas had good schools and where the crime was. When we finally moved, we put our furniture into a storage company (my husband’s employer paid for it) and rented an apartment. We rented furniture, washer, dryer from a local rental company (anything we didn’t put into storage, we had to move ourselves from the apartment so we brought only clothing, computer, a few pots & pans and dishes). We got a six month lease from the apartment company and paid extra for the right to terminate our lease early with a 30 day notice. We looked at around 60 houses over 2 months time and made an offer on the one that we bought. We weren’t in a hurry to buy the house and would have walked away from the deal if it hadn’t worked out for us. We got a good price, we like our house, it is in a good location with good schools and we are happy with our choice. Even if it is inconvenient to rent an apartment, I advise it because you may make a mistake if you are in a hurry to buy a house.

  24. Kansas Mom says:

    I really wish we’d made the inspector go into the crawlspace, lift the check the subfloor where the dishwasher should go and so much more. It was a short sale, so we couldn’t have gotten the seller to share the cost of the repairs, but at least we’d have had a better idea what we were getting into! (The guy took some of the ductwork from under the house. Who does that??)

  25. Douglas says:

    Thanks for the post. I’m in the process of getting my own house right now and this post help me out. I am young(23) and my parents are putting a lot of pressure on me to get a place soon, but I am trying to be patient and build a solid financial base.

    Trent, I don’t know if you’ve heard of the NACA program (NACA.com), but I’d like to hear your thoughts on it. They help you buy your home, and allow you to get a good mortgage rate that you can buy down even lower.

  26. Sara says:

    I’ve only been in my house a few weeks, but I can say already that I’m glad I bought a house at the low end of my price range. I had a (somewhat arbitrary) price limit in mind when I started looking, but my realtor pushed me into looking at homes $20-30k above that. I ended up buying one $10k below my limit. I was determined to make a 20% down payment, so it would have depleted my savings a lot more to buy a more expensive house (in addition to the larger mortgage payments, of course).

    The biggest thing I would have done differently is think harder about whether I should have bought a house at all. I wish I had considered my career options more carefully before deciding, essentially, to stay in the area for at least 5 more years.

  27. KC says:

    To piggyback Sara’s comment about buying at the low end of your range – the best decision my husband and I ever made was to stay in our nice, but small townhouse until we were just busting out of it. We saved so much money that way. Our mortgage was only 14% of our income. That allowed us to pay off all debt, including cars, and save for the next house. It also allowed us to make our small home as nice as we wanted. We’re taking this same approach with our next home. It’ll be very nice, but still on the low end of our price range. This way I can upgrade things to make the house more attractive and energy efficient. And I can still afford other nice things in my life.

  28. LA says:

    Love your postings, read them daily.

    We also bought in summer of 2007, and all your advice would have been helpful throughout the process. Like many other people, we found that as soon as we started looking for a home we got carried away and made an offer sooner than anticipated.

    One more piece of advice that I would add is to not allow Uncle Buck come stay with you for 2 weeks (he insisted he was “coming to help”). It didn’t work out and has soured familial relations.

  29. Noel says:

    Very good set of tips! I would like to add one more. Don’t just visually inspect things, test them out as well. These include the hot water, ac unit, doors, etc. as well as one thing I did not do when I bought my first house: flush the toilets a couple of times and let the water run to see if there are no plumbing issues i.e. clogs, leaks, etc.

  30. Eliza says:

    Get the home warranty! You can often get the seller to pay for it, but IMO it’s worth the money to get it yourself. We had it for one year and replaced a hot water heater and a washing machine for the cost of two deductibles — $80 each, IIRC.

  31. Ben says:

    Good article Trent. As far as the inspection goes, make sure they are certified with the American Society of Home Inspectors (http://www.ashi.org). Here in MN anyone with a tool belt and a business card can call themselves an inspector. In your case though I’ve never seen an inspector run the hot water for 10+ minutes to see if it percolates, usually the just check to make sure you actually have hot water. A house constantly needs maintenance, and unfortunately a hot water heater doesn’t tend to last as long as a furnace, AC, roof, siding, etc.

    Michael – $6,000 for an AC unit? OUCH! I guess in Vegas they get used much more then here in Minnesota. I replaced my old furnace and AC with Trane units and both totaled about that much.

    Kansas Mom – Sorry to hear about your missing ducts. You never know what you’re getting into with short sales and bank owned properties. I worked with a client who was loving everything about a house until we went into the basement – the prior owner removed the furnace! Not something you want to be without in Minnesota!

    Sara – I’m glad to hear you stuck to your guns on price, many people don’t. I felt like I made a big mistake after I purchased my 1st house. And even today I look back and laugh because it wasn’t the best house for me. But it’s all a learning experience and I’m glad I went through it.

  32. Shevy says:

    Interesting to see a couple of cautionary comments re tankless water heaters. I’m interested in buying one when my 25 year old electric water heater dies (probably within the next year or 2).

    It’s a little more than twice the cost of replacing the current one, but the promise of only spending to heat the water you actually use is a powerful one for us, as this is in our rural home (where I don’t expect to live full time for a few years yet).

    It also takes far less space and I could move the laundry into the space where the water heater is, plus have the tankless one in there. That would allow me to remove a larger closet currently housing the laundry equipment and really open up my living room (as the back wall of the laundry forms a wall in my living room).

    The tankless heater would be on a wall backing onto my bathroom, right beside my washer and about 4 or 5 feet away from the kitchen sink. It would be electric because I currently run electric and oil and it would be expensive to do the gasfitting for it.

    The 2 things I don’t quite understand are why stainless steel venting was required (and does that apply to an electric unit) and why there’s a problem for an electric unit to heat the water if it’s coming in below a certain temp. They sell units that are recommended for heating one “application” at a time and others that can handle two. Why not take the 2nd one and only use it for one application (i.e. laundry or showering or the dishwasher, but not all at once)? Wouldn’t it be powerful enough to heat the water?

  33. reulte says:

    Great advice — I’m just starting the search for buying my first house.

  34. I’ve seen friends who have empty rooms well into their move in date, and it really hit home the point that you don’t need to furnish everything right away. Good tips!

  35. K says:

    Dooley – as far as how much to save up… I would aim for about 25% of the asking price. Research homes in the area you are looking and their average cost. If you are looking at a $200,000 house, that is almost $50,000 (could be less if you negotiate down). Sounds like a lot, but you will feel much better if you put 20% down (you won’t be upside down, and you’ll have some equity to rely on if you need it). Closing costs are about 3% of the purchase price. Plus you will need money to pay utility fees, insurance, unexpected repairs, moving costs, etc. If you start saving after graduation and buy a house 5 years later, that would be about $750 a month you have to save (at 3%). If you are looking at a lower price range or are looking farther in advance, that would be less. Just don’t buy something more than 2.5 times your salary if that gives you an idea.

  36. Andi says:

    We, too, live in a rural area and pump our own well water. We installed a gas tankless water heater when we built our home and I would never go back. Like you mentioned, it made sense to only heat water we were using. And, we got a tax break for installing one which helped with the cost. I don’t know about the venting – let the contractor worry about that – but there were a couple things we had to be aware of. With the tankless heaters, you don’t get hot water immediately, you have to let the cold water in the pipes run through. Not a big wait though and if you’re super frugal (I’m not) then you can save the water for another use. The other thing we had to be careful of was putting the water heater in a fairly central location to all the faucets. Apparently if you get too far away from the heater, it cools off. Fortunately, this was not an issue for us (relatively small home) but we were told that a “booster” could be put at a faucet too far from the heater. Hopes this helps

  37. Teaspoon says:

    K.C. – Regarding buying a home remotely. This isn’t an option for everybody, but if it is an option for you, I would recommend deciding not to buy a house right away. Move to the new town, and rent for a year. That way, you’ll have a chance to get to know the area, figure out what neighborhoods you like and wouldn’t mind living in, and are much less likely to end up buying a house that you’ll regret. My mother did this recently when moving to Albuquerque, and is so glad that she did. She ended up buying her dream house last year, and would probably not have gotten such a great place if she’d been in a hurry and bought remotely.

  38. StephanieG says:

    I lived in a (new) apartment with a tankless water heater. I hated it. Showers are fine, but if you ever want a hot bath (not just warm), forget it.

    We’re on our third house, and we miss something every time. Our first house was built in 1929 and our inspector only noted one problem. Ha! We missed things as large as the absence of grounded electric in half the house… ’nuff said. The second house was built in the 70s and we missed that the previous owners were smokers (it had been aired out for sale), that the rooms had little natural light through the windows, and that the drains were made of ABS (which meant they would all be cracking soon). So the third house we had built new, with a customized plan. And, still, we missed things! The basement door is in a narrow hallway and no large furniture can be moved down there. And we should have added a half-bay to the garage for bikes–kicking ourselves it would have been only a few hundred bucks and now it’s nearly impossible! You just can’t think of everything.

    We hire movers every time. We’ve both ruined our backs (though not while moving) and cannot offer to help others move. Those of you who move yourselves and help others, watch out for your discs–once you herniate them, there’s no going back!

  39. TParkerson says:

    Thanks for the post Trent…I would caution readers to be careful with sites like Zillow. Has been my experience that they are notoriously out of date on info…the house I bought last Oct still shows for sale!

    Speaking of my adorable castle…I would like to add my pennies worth to all the posters that advised to use a licensed inspector. You will have to pay them, and I know that this will be money you do not want to spend. BUT, get an inspection no matter what! One of the reasons we fell in love with our home was that most of the big ticket remodel items had been done. The house, circa 1941, had been damaged during Hurricane Charley and had basically beeen rebuilt; new wiring, new knockdown, new floors, new a/c, new roof, new insulation, new pavers around the pool…yada, yada. We made the somewhat risky decision that because everything was shiny and new, we could save the inspection money…can you see where this is going?

    DH was taking down some shelving in our outside laundry and found a SIGNIFICANT water leak in our shower that will require a 5-10K remodel, including framing and subflooring in the next couple of years. We actually started a lawsuit against the previous owners and their realtor due to their failure to disclose but made the decision that our money is better invested in the remodel of the bathroom, not our attorney’s pocket.

    Brings up another point… find out if your state is a disclosure state and thoroughly examine the documents before the morning of closing. Don’t let a realtor or title agent bully you or rush you through the process in any way. (I will admit, I have done this process about a half dozen times, and it does get easier each time…still doesn’t mean I am infallible!) As a first time buyer, this will likely be the biggest thing you have ever done…ask lots of questions, trust your guts and breathe. Be aware that it is truly a buyer’s market but the professionals that depend on this for their living will be hungry too…you can get some great deals right now, but don’t let them pressure you into anything. Almost nothing in this process won’t wait for you to “sleep on it” for a night or two.

    Happy hunting and sweet dreams…Time’

  40. Kevin says:

    Lurker Carl-

    Could you point me to the articles you’ve read or backup for your claims that tankless water heaters don’t save money?

    I would bet you waste more energy heating a 50 gallon tank of water than in 25 feet of 1/2 copper pipe. Just my opinion though.

  41. Kevin says:

    Sorry that should say 1/2 inch copper pipe.

  42. katcorner says:

    The comment about the temperature setting on the water heater was a good one. Most are set too high. I believe the recommended setting is medium or about 120 which saves money and makes it much safer when you have children. No matter how closely you watch them, they can manage to do extremely dangerous things in much less time than you think.

  43. Catherine says:

    KC, we made a similar long-distance move 6 months ago, buying our first house in the process, and we have had no regrets so far. The buyer’s agent we hired was very, very helpful. There is no way we could have done it without him (he was recommended by my future employer). We looked for two days before making an offer, then did everything by phone and fax. We did have to rent a place to stay for a few days before the closing (and I had scheduled the movers to arrive with our belongings a couple days following).

    What we did was to forget about any preconceived notions or what our house should “be” like or look like, and to make a list of everything we needed it to have in terms of function–both in terms of location and in terms of “activities” we do in our house (e.g. we needed an area to watch TV, a space for guests to sleep, a convenient kitchen). We combined that with our price range and then looked for something that satisfied all our requirements (NOT for the perfect house or for the absolute best deal). We also set a time-limit, after which we would switch to a search for rental housing.

    The reasons we bought rather than renting:
    (1) We had been saving up to buy, and when we had finally reached a 20% down payment, we realized we weren’t going to stay in the area. Our new area is much cheaper, and we put 30% down. We are quite aware that it could take a long time to re-sell the house, but the payments are very manageable.
    (2) We know we will stay here for at least a few years, but we aren’t sure how much longer than that. Renting for a year and then buying would have only shortened the amount of time in which we would be trying to turn the house around.
    (3) My new employer paid for the move. Even if they hadn’t, it would have been a tax deduction. The second move would be all our of pocket (and being new here, we wouldn’t necessarily have help from friends).
    (4) The move was VERY stressful as it was. Moving to a rental would have been much less so, but we would have had the home-buying experience and ANOTHER move hanging over us. Frankly, I couldn’t have done it. The packing and unpacking were just too much.

    Overall, the agent was the key. He was very experienced and helped us tremendously. I have heard a lot of agent horror stories, but ours was a gem.

  44. BigMike says:

    I would have never thought of putting in an electric tankless water heater. You only need stainless with gas. I haven’t seen any of the large electric units for sale here in Iowa. Besides, during ICE storms and when electricity goes out you would not have any warm water either. Maybe the tankless electric water heater savings could eventual pay for a $5000+ whole house generator?

  45. Outstanding post, Trent. The Home Warranty was a big saver for me. It replaced a water heater, garage door opener, evaporative cooler, 17 electrical outlets and rootered the main drain all for $35 service calls. (Those have gone up to $55 these days.) I saved THOUSANDS of dollars. When you see a post like Michael’s (#6) you realize how valuable these are.

    If you are going to pay several hundred dollars for an inspector ( a girl I dated in Flagstaff paid $400) walk through with them and make sure they turn on everything and ask what UNSEEN troubles could be present. She let him inspect it while she was at work and now figures he just pulled up, looked in the window, and left. Six weeks in, she found a leak in her shower behind the drywall. Everything had to be torn out. The plumber told her it had probably been like that for at least a year.

    The one thing I wished I had done back in 1994 before I purchased my former house was talk to neighbors who were recent buyers. After I moved in, I found out my next door neighbor paid $40K LESS for his place and it was bigger than mine.

    The last thing is to offer far less money than the listed price. I am looking for another property over on the beach. I will offer at least 33% LESS than the price. A friend of mine picked up a duplex on the bay for $66K and it was offered at $120K. He looked for months, got laughed at and cussed at a lot…but what a sweet deal. Housing prices got way too inflated between 2003-2006 and I do not plan to pay for that nonsense.

  46. Debbie M says:

    * Prioritize! I was feeling pretty poor when I bought my first house, so I had only four priorities: 1) affordable to me, 2) easy access to downtown and the local college, 3) solid foundation, 4) big living room. I got much more than that, but wouldn’t have bought anything if I couldn’t have had those four things.

    * Don’t tell your real estate agent the maximum amount you are willing to pay, at least not at first. My agent never showed me anything below my “maximum.” Next time I’m going to give a number 20% or maybe even 40% lower (if there is a next time). See what’s out there at the lower price. (My maximum was just over 50% of the median price for a house at the time, and I still was able to find something, though most places were too inconvenient or needed too much work.) If you can be happy with something that doesn’t stretch you, your finances will be much, much better. And if not, at least you know.

    * Have someone inspect the yard—at least bring a gardening friend. All my lovely shade is gone now because I had only the live-fast die-young sort of trees. (And one of them took out my neighbor’s car when it went down!)

    * Check the geology and crime reports. Even if you are not in a flood zone, how close are you? (Turns out my back fence is the boundary!) How close is the nearest earthquake fault? You can get crime statistics from the police—note that areas with malls (like mine) have higher crime rates because of the crimes at the mall.

    * Negotiate on both price and what comes with the house. My house was set up for a garage sale, but in my offer I said I wanted to also keep the oven. That oven lasted me over 10 years, which gave me plenty of time to save for my next one. Maybe even if there is a law, say that you would like to keep all lighting fixtures and window treatments, etc. Even if they are ugly, they are there and they work and will give you time to get a good deal on your replacements.

    * Read the rules of any home-owners associations and check out neighborhood associations and talk to your possible future neighbors. Some of those have rules I really couldn’t deal with (like not allowing clotheslines or not allowing home businesses—not that I have one, but I’d like to have the option for one).

    * Approach the house from several directions—the real estate agent is likely to bring you via the prettiest route (with big old trees, for my house), not the ugliest (with the pawn shop and liquor store, for my house).

    * Don’t pick a house based on one thing—things can change. Stores go out of business and new ones are created. If you’re near a park, see what the laws are and if people are trying to get it re-zoned. I even have had entrance and exit ramps and even a road completely torn up with no replacements built! So make sure that even if your favorite things disappear, there are still a lot of other reasons to like being where you are.

    * Get an idea of whether you actually want the things you think you want like a big yard, a pool, a hot tub, and other things that require a lot of maintenance.

    I agree with Jennifer about buying a house in a new place. Rent one first! And if you have one of those jobs where you’re moving every 3-5 years, then don’t buy a house at all—you lose so much on all the closing costs and repairs. Just keep saving. When you retire you might be able to afford to pay cash for one.

    Another advantage of helping other people move is you get ideas for organizing your own move. My favorite: have every box labeled with which room it is to go into, so people unloading the truck know just what to do. I also really like renting a truck–have someone stationed at the truck at the old house to organize the packing. Then people can just bring things out. Also, have everything packed and cleaned up. Or have jobs for people who don’t like to carry stuff—like scrubbing the kitchen.

    (Note: in spite of all the negatives above, I still really like my house! It’s small and cheap enough that I’m going to be able to do some renovations soon, and the location is still good in spite of having to wait through extra lights to get onto the freeway. Also, they moved the airport away and are building condos and stores and hospital in its place, all walking distance from my house.)

  47. Lucky says:

    @Allison (#22) – I should have been more specific. It was “you” as a general, not “you” as Trent.

    I’ve had friends in the past who “helped” me move by showing up at the end of the day when there were literally two boxes left. Basically, they arrived in time for me to buy pizza and beer, and acted like they’d done me a huge favor. Strangely enough, when it came time for these friends to move, they expected me to show up first thing in the morning to help out with their entire move, and to help clean the (filthy) house. And I had helped them move several times before.

    So, help friends move, by all means. Just don’t do it expecting anything more than a handshake in return. If your friends have class, they’ll help you move. When they do, buy them pizza and beer.

  48. Betsy says:

    Dooley, the dollar amount you should save will vary depending on your geography. I live in the South, where we just sold our four bedroom, two bathroom,, 3,000-square-foot house (built in 1930, all hardwood, full built-in library, etc, etc) for $198K and we were VERY happy and made $36K on the sale. In other parts of the country, that’s an insanely cheap price for the house.

    The key is that you want to put 20 percent down if you can.

    For first-time home buyers, I cannot overemphasize the importance of connecting with your local community development corporation (CDC) or municipal government. Most areas of the country prefer homeowners to renters, and a lot of public-private partnerships exist to — in essence — give free money to people who will commit to the area for a few years.

    In our town, buyers who make the median local income or less can get matching funds up to $3K for a down payment — IF they go through the CDC, which funds the program through grants and municipal funding. On top of that, people who buy within the municipal limits can also get a loan of up to $10K toward your down payment — and the city forgives $2K of the loan every year you reside in the house. After five years, you have been given $10K in equity.

    We’re a very small community near a huge city, and the rules here don’t require moving to a particular neighborhood or undesirable area. The rules vary from city to city, but community development corporations are one fantastic resource that too few people explore.

  49. bakednudel says:

    Consumer Reports did a test of tankless water heaters last month and they found you would not save money on fuel over the life of the heater, given the high initial cost.

    This surprised me because I have experience of them in Europe and was planning to install one in my just-bought house with an elderly gas water heater.

    Instead I have the Home Warranty for the first year that will cover any problems and allow me to save for a modern and hopefully somewhat more efficient electric water heater.

  50. Catherine says:

    Another option for a hot water heater is a solar-powered one. I don’t know much about them, just that they exist.

  51. Catherine says:

    Make that plain “water heater” (we can’t help it, it’s ingrained!).

  52. K says:

    Another thing… Make sure you buy a house that you can afford, but don’t rule out houses that are slightly above your price range if they are in a good location. Our “max” was $150k. There was a house originally listed for $180k that got reduced to $160k and had been on the market for a long time, so we were able to negotiate it and get it for $140k. This is a house that didn’t show up on our searches because of price, but we were driving by and saw it and decided to look, and we ended up paying a price that we were ok with. This is harder if you have a pushy agent.

  53. DC says:

    Check out for a great description of flushing a water heater. If flushing doesn’t fix the problem, look at section 4 where it talks about dissolving the sediment chemically. BTW — everyone should flush their water heaters annually…EVERYONE!

    If you’re a little bit handy, check your water heater ANODE rod as well. It will GREATLY extend the life of your water heater.

  54. Dooley says:

    Thank you K and Betsy! I really appreciate your input.

    For now, at least, I’m pretty sure I would want to stay in the West (Colorado, maybe Montana or Oregon). Unfortunately, all three of these states have attracted a ridiculous amount of people in recent years, so housing prices SKYROCKETED. No low prices for lovely Southern homes. :(

    That being said, I would be willing to wait a few extra years to make sure I could afford a nice place. :)

    On an unrelated note, something that might be of interest to people looking for either a home to buy or a place to rent is WalkScore.com.

    When I was in Oregon over the summer with my boyfriend, we stayed in an apartment that was in a GREAT location. We were literally walking distance from the river, the park, the town’s central shopping district, and his job. We only drove anywhere if we were getting a large amount of groceries, or if I was going to the gym.

    It made me realize just how nice it is to live in close proximity to the “important” things — whatever those are for you.

  55. Lurker Carl says:

    Kevin, the thermodynamics of water don’t change according to how you heat it.

    Water loses heat quickly when sitting idle in copper pipe, long runs of copper pipe means 1/4 gallon or more of cold water before must be replaced with hot water before it reaches the tap. That heated water is wasted energy if it gets cold before hot water is called for again. If hot water is used often, that long run of pipe is less important. Actual energy savings correlates to how compactly all your plumbing fixtures are arranged in respect to the water heater AND how often you use hot water. A home with efficient plumbing layout and low hot water usage will save money, less so with widely spaced fixtures or high hot water consumption.

    Electric water heaters take considerably longer to heat water than gas heaters. Thus, colder incoming water does not reach appropriate temperatures unless flow is decreased or larger units are acquired to compensate for the required temperature increase. Most homes in colder climates would need to upgrade their electric panel for the whole house electric units.

  56. Barbara says:

    Another thing to be sure to have in the house contract is what contents in the house you *don’t* want to remain. Finally figured this one out after having to spend too many weekends trying to dispose of old carpets, broken furniture, and tons of old curtain rods left in an attic. Check the crawl space and under any porches as well for old pieces of wood, gutters, old pipes which you would have no use for and would like to have removed. These can attract insects and be costly to dispose in the landfill. ALso look for junk and old used oil you wouldn’t want to inherit in the garage.

  57. Erica says:

    Don’t just go see the house in the daytime, go at different times. Like 3am to see what the traffic is like, especially near a main street or the neighbors who sleep all day but party all night ! I have a steel mill near me, you can’t hear it in the daytime but you can hear the loudspeaker at night in the summertime with the windows open. Plus if you are near any kind of ‘tourist attraction’ be prepared for lots of lost people turning around in your driveway or asking for directions. Walk around the block to see what is there, see how far away the bus stop is or the convenient store. It may not seem like a long way when you are driving around but walking is different especially in the snow!

  58. Misty says:

    As an insurance claims adjuster- and a recent 1st time homeowner, I have learned several things. We moved across country, staying in a hotel while buying a house. DONT DO THIS! Looking back, we should have rented for a while, found out if we liked the area, my husband’s new job and where the best houses/deals were. Also, the market sank even lower, so we could have saved some money. That was the first lesson.
    The other is to purchase a home waranty or have the seller include it with the package. Our home warranty has saved us many times in the first year- replacing our water heater, pulling clogs out our main drainage lines and fixing a clogged shower. My husband is not handy, so we would have had to hire someone to do the job. The seller included the warranty in the package and we have decided to keep it at least for another year until we figure out all the kinks are worked out.

  59. Jessica says:

    Man, I wish I would’ve seen this post two years ago! My husband and I bought our first house two years ago this month. We were both very young and our price range yeilded a lot of fixer-uppers or decent homes in not so decent neighborhoods. We finally found a house that had been recently fixed up and was in a nice neighborhood just in our price range. We ordered a home inspection that noted a few minor things so we went ahead and bought the house.

    I don’t regret the decision to buy the house one bit, but there are a few things I wish we would’ve noticed… The fresh paint and other new things were detracting from some other problems… The downstairs walls are made of plaster and were cracking (conveniently covered up with pictures and mirrors) The sump pump was draining into the crawl space, the floors are uneven in some spots, some light switches don’t work. Basically, someone had bought a house in terrible condition, fixed it up as cheaply as possible and flipped it. So almost everything that was so new and we thought were bonuses will actually need to be replaced in a few years… It appeared to be so much nicer than the other houses we had looked at that we really thought it was perfect. Perhaps we were too eager to buy… Of course our home inspector did a terrible job, and has actually been sued numerous times since doing our inspection. So this house is going to end up costing us more in repairs than we originally intended, but we still like it.

    Another thing, we have an EXTREMELY nosey, rude neighbor. She is a single woman in her mid-50s who has a drinking problem. She likes to stir up trouble. If I would’ve known she was going to be so terrible of a neighbor, I would’ve kept looking…

  60. singingwater says:

    One of the things I regret was not checking out the neighborhood a little more thoroughly– like habits and noise/light patterns of some of the residents. It’s also good to walk around at night. It’s hard when there is a lot of pressure to buy from a realtor or multiple sellers competing and taking bids.
    Also it’s always good to pay for an independent inspection regardless of whether the seller is providing/paying for one or not. Independent licensed inspectors are better than large warranty companies. We got “stung” on one of those packages that included the warranty. It seemed like a gift from the seller but it was actually a rubberstamp for the seller. And the seller lied on the disclosure statement. I know this varies from state to state. In New Mexico the inspection and appraisal system is still very corrupt.
    In the end I’m glad we bought the house and have made it beautiful over the past 10 yrs.
    Don’t hesitate to make yourself a pest and get the answers you really need from everyone.

  61. jreed says:

    Make sure all old paint is taken with the owners especially the oil base which is just about impossible to get rid of.

  62. Karen says:

    After moving into my first home, single and at the age of 24, I had to immediately replace the refrigerator. The repairman assumed the seller had been unplugging the refrigerator every night, as the ice would build up on the coils causing the refrigerator to not cool. Unfortunately, she had been doing that a long time and had caused irreparable damage. Something I wasn’t prepared for, but I don’t know how anybody could have ever caught the problem. Buying the house was the best thing I had ever done, and I recently sold the house for 10 times what I paid for it after 24 years, as my husband and I outgrew the house. Yes, I had saved and was able to come up with 1/3 down and a 10-year mortgage. There were a few tight years after moving in, but hard work does pay off in the long run. Enjoy your new home!

  63. penelopy says:

    My advice–never offer or pay the asking price. you should always pay 10-15% less than the asking price.

    Also, never count on others returning the favor when you help them move. It sounds good in theory but people tend to be so unreliable these days. I once shared Trent’s theory and practiced it and NEVER because I expected something in return. I like helping people and figured that if I help others, help will be there when I need it, even if it isn’t from the person I helped. The thing is that I don’t have family or reliable friends in this area. Nope, it doesn’t make a difference. I’ve helped ‘friends’ move who stood me up when it came my turn. They didn’t even have the decency to let me know so I could make other arrangements. What did I do? Help them on their next move anyway.

  64. Lady Jane says:

    The advice not to rush, though hard to follow, is gold. When we had our son, my boyfriend and I were renting a two bedroom flat in a suburb within walking distance to our city jobs and things we like to do. Overnight it went from more than adequate space for 2 adults to being packed to the rafters with baby stuff. This put us into a panic and we bought a very large house on a big block in a semi-rural suburb 30 minutes drive from the city centre. The house was built by an amateur whose vision was not matched by his skill. It has given us a lot of maintenance problems and we work too hard at our day jobs to have much time or energy left for more than basic house and garden work. On the upside, the area is highly valued and we have nearly paid off the mortgage. We are now in a position to demolish the house and build something better on the block. From this experience, I recommend that new parents not rush to buy or buy bigger, especially if it means moving away from the things you love and will enjoy again once your life settles into a new mormality

  65. Lady Jane says:

    That should be normality. Curse this macbook keyboard!

  66. Two comments regarding your excellent post: Make sure you can afford your new home. Don’t get in over your head and become “house poor”. And secondly, when negotiating with the seller, play hardball. You can always come up in price.

  67. AnnJo says:

    A few more tips to add to the wonderful lists above:

    1. By setting up an automatic payment arrangement on your mortgage, you can often get a .25% rate reduction. On a $100,000 mortgage, that’s $250 a year.

    2. Getting a 15 year term instead of 30 will usually get you a .5% – .75% lower rate. The payments will be higher, but not as much as you might think. Again, for a $100,000 loan, a 30 year mortgage at 6.75% will have payments of $648.60 for 30 years, compared to a 15-year mortgage at 6%, which will be $843.86 payments for only 15 years. That’s less than $200 a month for 15 years of debt freedom.

    3. If the home you are buying is well-maintained, try to get the sellers to walk you through their maintenance schedule and any special tips they might have, so that you can kep it that way. Sellers who have taken pride in their home will usually be happy to share their knowledge with you so that you can enjoy it as they have. Ask also if they will share with you the names and numbers of the tradespeople they have used and been happy with(plumbers, electricians, pest control, yard service, tree trimmers, etc.)

    4. Meet the neighbors BEFORE you buy. Just knock on the door, introduce yourself as someone interested in the house next door, and ask how long they’ve lived in the neighborhood and if they would mind telling you a little about it – traffic, crime, what the public services are like (police, fire, garbage collection, local planning office), neighborhood activities, good places nearby to shop, for the kids to play, etc. The info will be helpful, but it will also give you a chance to size up who you might be living next to for the next few years. If there are fences, you might ask who put them up and how they are maintained. You can ask whether they are aware of any problems with the house you’re interested in, but realize they might be either loyal to or hostile to their next door neighbor, so take everything with a grain of salt. Ask who THEY use as a plumber, electrician, etc. Ask if they know whether anybody else in the neighborhood is considering selling soon. If you do move into the neighborhood, send them a “hostess” type gift with a thank you card for sharing their knowledge. Good neighbors can make up for a lot of house problems, and a great house means nothing if your neighbors are nasty.

    5. Make sure you understand ALL of the services you will need to pay for and how much they cost. Utilities can give you historical usage for the property and applicable rates. Pest control is one that is very important in some areas prone to termites and less so in others. Some areas have homeowners association dues. In some areas, garbage collection includes extra charges for recycling or yard waste collection. Some areas get virtually no TV reception without cable or satellite. If you are on a long-term cell phone contract, check your provider’s coverage in the area. Are there special assessments being paid? Who is responsible for maintaining drainage culverts, trimming trees near power lines or roads, re-graveling unpaved roads and shared driveways? Are there unspoken rules about landscaping that interferes with views?

    6. If there’s been obvious recent work done on the house, check the building department to see what permits have been issued.

    7. Check the physical markers of your lot boundaries and ask the inspector to help identify anything that might be encroaching onto the property from a neighbor’s property, or vice versa, or might be encroaching into legal set-backs or side yard limits. One friend of mine found out that the northern two feet of the newly built garage had been been built within the sideyard area, and would have to be removed.

    8. When you’re moving in, thoroughly vacuum or clean out all vents (especially dryer and heat vents), duct-work, heater grates, etc.

    9. Make sure you are aware of any covenants, restrictions, ordinances or circumstances that will limit how you can use your property. Want to keep a few chickens? Might not be legal. Want to replace your roof with asphalt shingles instead of cedar shakes? Might be against the homeowner association rules. Want to cut down the tree blocking your view or run a side-business or meet with clients at home? Might not be allowed. Want to put in a garden shed, a flagpole, a playhouse for the kids, an above-ground pool, a swing set, a clothesline, exterior lighting, a rockery, a vegetable garden, a deck, a fence? There may be restrictions on all these things and more. Are there noise ordinances? Youth curfews? Weekly three hour concerts at the park across the street? Frequent long detours due to flooding? Frequent power outages due to power lines along heavily treed roads where branches fall during wind or snow storms? Brilliant lights glaring into your yard and windows from Friday night football games at the high school a block away? Even if none of these things are deal-breakers, you will be happier knowing about them ahead of time than finding out afterwards.

    10. I know this is controversial, but question the need for a mortgage broker. For people who actually can afford the house they want to buy, i.e., have reasonable credit scores, an adequate down payment, and can afford the payments, dealing directly with banks and credit unions almost always results in a better rate and lower closing costs, which makes sense, because brokers have to earn their living somehow and whether you pay them directly or they are paid by the lender, the cost is going to come back to you somehow.

  68. Carolyn says:

    Excellent article. I moved across country for the first time in my life and decided to rent six months before purchasing. I am so glad I rented first. Neighborhoods now become familiar and look differently to me than when I was just visiting on a weekend. I moved 30 miles from where I’m renting. It pays to rent before purchasing to learn areas. Also, you won’t purchase in a difficult to sell area if you want to get away from it –

  69. Tammy says:

    We made so many mistakes buying our first home!

    First, I fell in love with a house and didn’t look at enough comps. A lot of nice cosmetic work had been done on our house, but the bones of the house needed (and still need) a lot of work. $7K House roof, $3K garage roof, siding, $500 breaker box, $500 water heater, plaster work, old copper plumbing problems leading to water damage, etc, etc, etc…money pit! (Our very good home inspector told me all of this, but I was in love with 100 year old woodwork and a newly remodeled bathroom).

    Second, we didn’t work with a good realtor. We looked for houses on our own.

    Third, I didn’t shop around enough for a good mortgage rate. I got a good fixed rate program with no PMI and a lot of discounts on closing costs, but I still wonder if a better rate was out there.

    Fourth, I disregarded my husband’s bad feeling about the rental property next door. We’ve had a LOT of bad neighbors of the screaming variety. (Why do some people just feel they have to crank up the volume of their voices to 11 all the time?)

    So hindsight is 20/20. Next time I will save more, shop longer, and try not to get emotionally attached to any one property.

  70. Julie says:

    Great list! I broke most of those rules when I bought my house 10 years ago. I wanted privacy as I previously lived in a track house just a few feet away from the next house. From my backyard I could see the backyards of 16 other houses. My neighbor sang in the shower every morning at the top of his lungs and sounded like 6 cats hacking up hairballs. I could hear his toilet flush.

    So, after looking at over 50 houses (and with a real estate agent that got so frustrated with us he went back to drinking after years on the wagon), I found my current house. The actual construction date no one really knows, its estimated in the 30s, sometime. I had a home inspection and all he could really say is “are you sure you want this house?” I fell in love with the grounds and missed a few things.

    Like the bathroom ceiling coming down in chunks (it had actual mushrooms growing out of the cracks) a gas fireplace that leaked gas so badly we couldnt use it. The roof along one wall that became a water feature when it rained. The air conditioning that only refrigerates the bedroom, the one room we are never in during the day.

    The lack of insulation, the broken screens, the scary wiring (I should have noticed the sparking that came from the bedroom lighting), the 1953 stove that sometimes works, termites beyond belief (our termite company quit saying they had done all they could do).

    I also missed that the washing machine was hooked up outside the kitchen and the dryer downstairs in the carport. Yep, no garage (we have enclosed it since). The “second bedroom” which is really no more than an enclosed porch, actually has half inch to one inch gaps all along the ceiling to the roofline and in the winter when the wind is blowing it looks like a hollywood horror moview with all the curtains blowing out a foot.

    With that said, I got the house at a killer price, in 7 years I will own it, and I love the location so much I cant imagine ever moving. So the adventure continues. But sometimes, when the wiring is sparking, the wind is whipping through the house, the gas leak smell is stronger and termite dust is raining on our heads, I think maybe I could have done better..

  71. booker says:

    Thanks for saying this in such an eloquent and approachable way

  72. booker says:

    Wow that really is a useful list. I know what I want to do but I can see it being useful for others. Loved it!

  73. Mark Gavagan says:

    Great point Jay (#8) about hiring a plumber to get the sewer pipes scoped.

    Inspectors have a wide range of ability and integrity. An extra $500-800 for a plumber, electrician and septic inspector (if applicable) can go a very long way (even in a brand new home, since construction may be shoddy).

    Consider letting these people know they will not be hired to do the work they uncover, so they’ll be as objective as possible. An extra $10 cash along with a cup of coffee and a polite comment such as “Thanks for coming out today. We really need a professional’s opinion.” goes a long way.

    Take great notes and pictures of everything that’s uncovered, which makes your findings more difficult to dismiss.

  74. I like this blog so much, saved to my bookmarks .

Leave a Reply

Your email address will not be published. Required fields are marked *