Re: purchasing our rental

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Posted by Christine Baker on October 07, 1998 at 18:43:33:

In Reply to: purchasing our rental posted by Marta on September 28, 1998 at 14:37:08:

: We are considering purchasing our current home, which we are renting. Is the process any different than purchasing a home that we find through a realtor. The owners want to sell immediately.We have never purchased a home before. We live in Vallejo, CA.

I suggest you hire a broker to get comps on the property, establish market value, clue you in on common inspection practices and general procedures.

Expect to pay about $2,000, or pay about $100+ an hour. Hire somebody with E-mail, and you'll save yourself a lot of "you misunderstood ...."

And of course you'll have to pay up front or as you go.

Read the Loan Shopping page, follow the instructions. Hopefully your credit doesn't need work. Call several brokers about special first-time buyer programs. Ask questions, and listen to, or even better READ the answers.

I bought my first house from my landlord.

Fortunately, our landlord was fairly honest with us, as I didn't have a clue what we were doing. And we had several weeks before he brought the contract, sat down at our kitchen table, filled out the contract, and signed it right then and there. He went to open escrow. I had no idea what the word escrow meant.

I talked with numerous lenders and brokers, READ and UNDERSTOOD disclosures about ARM margins and caps, floors, adjustment periods, etc. I still remember calculating the worst case scenario for the 30 year term of the negative amortization loan we considered on my CPM Kaypro with Supercalc one night around 1 AM.

And I looked all the houses for sale in the neighborhood. They were selling fast, close to asking price or above, and were all little cracker box tract houses like ours.

Our landlord had just bought the house a year earlier, and he had obtained a termite report, so we didn't think we'd have any problems and we got a termite clearance ourselves. I didn't find out about home inspections until over a year later.

With 20/20 hindsight, I'd say the landlord did REAL well, not having to pay commission and still getting top dollar AND having no hassles at all. He kept telling us that his ex wife would list it for him without charging commission. And at the time I didn't know how commissions work, obviously the buyer's agent wouldn't have worked free of charge.

We did well too, 4 month later we put a 2nd mortgage on that house to buy a bigger place. It appraised for $40K (or 30%) more than what we paid for. Beginner's luck!

I did spend ALL my free time asking, reading and listening about real estate for at least a month.

Hope you'll have as much luck as I did!

Christine


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