Here we go again…

So pretty much as soon as we started thinking our first try at home buying was going to fall through (thanks to major water damage and mold), my husband and I started looking at other places.  We drove past at least 15 different houses checking out neighborhoods and discovering that not all pictures on real estate websites are accurate when it comes to houses.  It’s amazing what taking a photo at a certain angle can do for a house.  Busy streets disappear, yards look bigger…  We were able to eliminate many of the houses we were interested in and narrowed it down to two in particular.

Being just a little bit on the anal side (I prefer “detail oriented”) I created a spreadsheet to compare the properties on everything from price to included appliances.  We drove by both neighborhoods and liked the areas.  In the spirit of HGTV’s House Hunters here are the two houses we were most interested in:

House #1 for $219,000

4 bedroom, 3 bath split level on 9,124 sq ft lot  in a nice culdesac neighborhood.  HOA gives access to a nice community pool.  The house has 2420 sq feet of living space with a formal dining and living room, family room, game room and a brand new kitchen.  Master bedroom has attached bathroom with soaking tub and separate shower.  There is no garage, just a paved driveway.  The home was built in 1994 and appears to be in good condition.

House #2 for 239,900

5 bedroom, 3 bath split level on quiet 1.3 acre corner lot.  No HOA.  The house has 2408 sq feet of living space including a large family room with wood burning fireplace and formal dining and living room.  The house was built in 1967 and has very “kitschy” dated bathrooms (one all pink, one all blue and one all green) and a somewhat dated but large kitchen.  Wood floors in excellent condition all through the house and a new furnace and hot water heater.  Attached 1+ garage with separate entrance and a circular driveway.

So, did we decided to make an offer?  Which house did we go with?  The more affordable split level with newer kitchen and pool access?  Or the more expensive, dated house on the large lot?  We went with…

House number two!  We are making an offer today on the house.  While we liked the idea of pool access and a new kitchen, there were ultimately two factors that helped us with our decision.  First was lot size.  We have 3 very active kids with one more on the way and House #2’s large lot is perfect for tiring them out 😉  The second factor had to do with House #1.  When we were arranging with our real estate agent to see the houses, we found out House #1 was a short sale property.  That pretty much took it off our list all together.

Here’s another instance where knowledge gave us power in our decision making process.  When we first started looking at houses, I googled all kinds of thing to get more information.  I learned about foreclosures and auctions and short sales.  Basically a short sale is when the bank and the home owner agree to sell the house for less than what is due on the mortgage.  Basically it’s a pre-forclosure move.  Unfortunately, nothing is short about the time frame when buying a short sale property.  It’s not just the seller who has to accept your offer on a short sale, it’s the lender too, and just because one says yes doesn’t mean the other will.  Short sales can take up to 6 months to close and without an agent who has experience with short sales, it’s often difficult to close at all.

So basically, although the house was cool, we didn’t want to deal with all the problems and uncertainties that come along with a short sale.  We really like the second house and although it’s a bit dated, it has major potential.  Hopefully the sellers will accept our offer and this time we can make it all the way to closing!

Want more information on short sales?  Check out this article from REALTOR Magazine Online.

Rural Development Loans – They’re not just for farmers!

If you’re buying a home, you’ve probably done some research on what types of loans are available.  Finding the right loan for you is like finding that perfect little black dress… it fits you in all the right places!  VA, FHA, 30 year fixed, ARM, Interest Only… There are a lot of programs out there!

When we were first looking for a house, our real estate agent said she could get us in using an RD loan.  We had never heard of an RD loan, and to be honest, at first I thought it sounded fishy.  Step one was asking her what the heck RD stood for!  She explained that she was talking about a USDA Rural Development loan.  My next question:  can I google it?  I always feel better when I can find information on something easily for myself, not just trust what someone is telling me.  I went to the Rural Development website which is chock full of information.

Here are some things I discovered:

1.  Rural Development loans are not available to everyone.  First, you must have a qualifying income.  These loans are specifically for lower to low-income buyers.  Then, the home you are buying has to be in an eligible area.  You can find links on the site where you can check income limits and property eligibility.

2.  Rural Development loans are kind of like FHA loans in that you don’t have to have an amazing credit score.  This is great for those of us who are working on repairing our credit.

3.  Rural Development loans allow you to get into a house with no money down unlike FHA loans which require a 3% down payment.

4.  Rural Development loans are 30 year fixed-interest rate loans.  This means that you can lock in your interest rate and it will not go up for the life of the loan.

There is a lot more information out there regarding Rural Development loans, but one other thing we discovered is that not all lenders know about them and so some might not even offer it as an option.  Ask your real estate agent to do some research, or you could locate your local RD office with any questions.  They may be able to get you hooked up with a lender who has experience with this type of loan.

Sometimes the home buying process can be daunting, especially when your real estate agent or lender starts using terminology you’re not familiar with.  Doing some research on your own can help you feel empowered when you’re discussing something as big a home loan.  Don’t forget that just like at your doctor’s office, if you don’t understand what someone is telling you, ask them to explain it!  You have a right to know!