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Have a very detailed inspector and a good lawyer. Understand the local market and don’t be afraid to make aggressive offers especially if the house has been on the market for a while. When negotiating price be prepared to walk away... if the market isn’t hot where you are they might come back and agree to what you want.
Save up wayyy more than you think! One thing that shocked us were the sheer amount of additional fees and extra costs we ran into - if your offer is over the assessment you are required to pay the difference out of pocket (our offer ended up being $13k OVER the assessment so we had to pay that cost). Repairs after inspections add up. Taxes. Updates. You name it - just save up as much as possible to be safe.
Also if you find a house you love write a letter and maybe even make a video. Our house was on the market for 2 full days... we fell in love and immediately wrote a heartfelt letter about why we loved the house and our realtor also filmed a little video of us in the house during our tour talking about why we loved it and introducing ourselves. There were 18 offers by the time it closed (and even a cash offer for more than we offered) but the owners chose us because of our note and video.
Rising Star
That video = $$$$$
I can squeeze you for more cash because the wife will buy on emotion and not logic. Just got to say sorry but another offer came in at the same time for $10K over asking price. If you can counter I would love to sell to you.
I just did this, closed 5 weeks ago.. I could share like an entire novel.
1. Shop around for mortgage rates, even if you get pre-approved by one, check others. I managed to get a 2.875%, no points, 30 year mortgage for 5% down. I had one offer already and leveraged that to other lenders.
2. Ask your realtor for recommendations on attorney, inspector, etc, but do your due diligence. I found out that the attorney my realtor recommended had been suspended for mismanaging real estate escrow funds a couple years prior. I fired the attorney and went through the EY legal plan (real estate transactions were covered and I didn't have to pay out of pocket). If you're not enrolled in the plan yet, but you think you'll buy a home in the next year, I highly encourage you to do it. It's like $7/mo and it saved me $600 in attorney fees.
3. You decide what the offer should be on the home, not your realtor. I did a really low ball offer and he was kind of uncomfortable at first, but I didn't care. It's my money at the end of the day. They also have an incentive to make you put in a higher offer as they get paid on commission based on sell price.
4. Get a good inspector and be there for inspection day. Write down anything you want current owner to change before you commit, have your attorney manage that communication.
5. Get a warranty for all appliances in the home (seller should pay for this). You don't want to purchase it and have everything break in the first year. It's SO expensive.
6. Stay organized with paperwork, write down daily to-do's etc. It's a TON of work. I had so many curveballs.
Enthusiast
Be careful about "shopping around for mortgage rates." You don't want multiple hard pulls in your credit
Enthusiast
Don't expect your wire transfer to go through the day you initiate it (damn bank controls)
Ditto on this. Especially if you have wires coming from multiple sources like liquidating investments. I almost missed my close of escrow because I didn’t realize wires took so many days.
Don’t get too attached to any one house you are considering. Also, don’t limit your search to too narrow a geographic area unless you have a very compelling reason to do so.
Build! We did it for our first home and recommend it to everyone! It’s not impossible, very doable!
I’m in the same location there’s plenty. Go with a builder and build in a new community. Look up new build communities in your area.
Rising Star
TRIPLE check before sending your wires. Call the wire company using a regular number you have with them, check it with your RE agent. Don’t use a number if they send it to you on a new email. The emails can look similar but fraudulent. Just google house buying wire fraud for more details on how specifically dangerous these can be.
Mortgage Wire fraud is incredibly common and sophisticated these days. They can get the exact title company name, your address, your exact payment amounts etc. Title and escrow companies get hacked bc this is such an easy way to get wired hundreds of thousands of dollars.
Rising Star
Talk to your realtor to get a sense of the market in the area. Compare recent sales in the area to the house you're buying and make an educational guess regarding it's value.
Associate 1 - let me ask a question first. In RE transactions, buyers don't pay agents. So, one - who pays them? Two - how is the amount paid to the buyer agent is decided. Probably quick google.
Also - what's diff between transactional business vs repetitive business. Essentially the diff between business model for retail store vs car showroom.
Agree with EY1 - except attorney part. Didn’t need an attorney for any part of buying the house. Did everything else the same.
And 20% down instead of 5%
R/firsttimehomebuyer
Some good points here - few pain points to share from my recent experience:
1) I used the EY legal plan and in my area unfortunately several attorneys I spoke with were moving out of the plan as it is not profitable for them, therefore, you might be in a you get what you pay for type situation. While my attorney was $600 less with the plan, the amount of time and stress involved was not worth it and potentially can end up costing you more if they are very inexperienced, so definitely research before committing.
2) Push for as long of an inspection period as you can, considering how competitive the market is in your area, and perform as detailed of an inspection as possible. We ended up having the seller pay for most of our closing costs based on items discovered that our realtor initially did not think we would get a dollar. Have plumbers, etc. come out and put in writing cost to repair.
3) Don’t assume the financing contingency clause always covers you as an appraisal contingency as well - make sure you are truly comfortable waiving this contingency at the offer stage.
4) Audit your closing statement in detail prior to closing day
5) This one is more minor - but if you expect the seller to settle property taxes that are estimated at time of closing once the bill is received after close make sure all parties sign a proration agreement at closing
Rising Star
1. Never pass on the home inspection.
2. Don’t get emotional about a house or you will overpay badly. Friend did this on house priced at $600K. Had to borrow money from mom and gut their 401K to get mortgage where bank would issue a loan. They may never recoup what they spent and killed their retirement too.
3. Don’t refinance to use that equity.
4. Pay an extra payment per year split up monthly or all at once; will save you tens of thousands in interest.
5. Never waste money on those American home shield insurance. They are a complete scam! Save the premiums in a special account instead.
Pro
Remove emotion from selecting a house to purchase. Make your list of requirements, and nice to haves. Do not waver from these lists.
Enthusiast
Why would I need lawyer to buy a house? Going through it now and don't have one. Do I need one?? 😬
Enthusiast
Okay...recs on finding one??